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Bank Mandiri optimizes Farmer Entrepreneurship program
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(Courtesy of Bank Mandiri)
I
n a campaign to increase the welfare of farmers, state-owned Bank Mandiri is stepping up efforts to expand its Farmer Entrepreneurship program by actively holding mentorship programs and providing funding through the microcredit program (KUR).
Bank Mandiri’s support of the Farmer Entrepreneurship program in Pamarican, Ciamis, West Java, started in October 2017 in the form of providing funding through KUR, backing the development of an integrated rice processing center (SPBT) with the farmers’ union group Gapoktan through its CSR program and holding a professional business management coaching program.
Two companies have been founded since the program’s implementation: PT Mitra Desa Pamarican (PT MDP), whose shares are owned by Gapoktan and village-owned businesses (BUMdes); and state-owned enterprise (SOE) subsidiary PT Mitra Bumdes Nusantara. Management of the SPBT is done in collaboration with PT MDP to ensure that farmers and villagers as shareholders will receive the benefits and profits.
According to Bank Mandiri director Darmawan Junaidi, KUR funding will provide farmers access to low-interest loans to purchase seeds, fertilizer, pesticides and other equipment that will help farmers carry out various projects and increase their income.
“Support in the form of affordable loans will multiply the benefits farmers can receive from the Farmer Entrepreneurship program. We hope that our support can support the government’s efforts in providing welfare for farmers, especially during the pandemic,” he said during a visit to the Pamarican SPBT with SOE Minister Erick Thohir on Sunday.
Since its implementation, the Farmer Entrepreneurship program has involved farmers from 14 farmer groups in Pamarican district. As of May, KUR funding has reached more than 1,400 farmers, with a total disbursement of Rp 22.81 billion (US$1.6 million).
Nationally, Bank Mandiri has disbursed Rp 4.32 trillion to 45,301 debtors through its agricultural KUR as of May, amounting to 27.53 percent of Bank Mandiri’s total KUR disbursement.
Darmawan also noted that the bank was collaborating with the nonprofit group Mandiri Amal Insani (MAI) to disburse interest-free revolving credit to farmers categorized as dhuafa (poor). In its implementation, MAI is working closely with PT MDP for the disbursement, including in compiling the scheme and eligibility criteria.
“Currently, the outstanding revolving credit that has been handed over to PT MDP has reached Rp 1 billion, disbursed to 176 farmers covering 56 hectares in farmland,” he said.
Bank Mandiri is also expanding the collaboration between PT MDP with other SOEs, including Pupuk Indonesia Holding Company (PIHC) through the Agro Solution program, a cultivation mentorship program for farmers covering soil healthiness tests and fertilizer combinations to improve productivity in both quantity and quality. It is hoped that the program will increase income for farmers as well as for PT MDP to provide high-quality grains.
Through its corporate social responsibility (CSR) program, Bank Mandiri has provided support in the form of hand tractors to 14 farmer groups worth Rp 450 million and hammer mills worth Rp 600 million. The hand tractor is expected to increase productivity and lower operating costs, while the hammer mill is designed to crush grains into fine grain, allowing it to be sold at a higher price.
To date, the Farmer Entrepreneurship program in Pamarican has had a positive impact, not only from an increase in raw material absorption but also production, sales and profits for PT MDP. Despite the pandemic, PT MDP successfully increased its profits for 2020, with a rise of 150 percent from the previous year. The rise was attributed to a year-on-year (YoY) increase in rice production by 97 percent to 6,594 tons and sales by 102 percent to 6,814 tons in December 2020.
As part of its business diversification efforts to increase profits, PT MDP also manages the BUMNShop minimarket to sell daily needs alongside SOEs and nearby micro, small and medium enterprises (MSME). As of 2020, BUMNShop sales have reached Rp 1 billion, providing profit for the company that will be enjoyed by farmers and villagers as shareholders.
PT MDP is also diversifying to become a supplier for more than 130 warungs. Along with supplying the warungs, PT MDP also provides a coaching program on product placement and digitalization.
Going forward, it is hoped that the program can continue to be run with strong collaboration and synergy with other SOEs and their subsidiaries to increase farmers’ welfare.
“The Farmer Entrepreneurship program is also expanding to Kebumen, Central Java, so that the Kebumen SPBTs can also record optimum results,” Darmawan concluded.
