A World Bank study (2017) estimates that approximately 62% of the world’s adult population has access to formal financial services. However, in Indonesia this percentage is lower, at 49%. Indonesia’s agriculture sector only contributes 6.9% of the bank credit portfolio, while the vast majority of the credit goes to agricultural companies or high value supply chain actors in agriculture, and not to smallholder farming households. Reasons for farmers’ low access to finance include reluctance and scepticism around servicing the micro-segment of the micro, small and medium enterprise (MSME) market, the difficulty and costs associated with accessing the credit data history of smallholder farmers, and farmers’ own limited awareness of suitable financial products and services.
In the first phase of the program, SAFIRA collaborated with partners to improve farmers' access to agricultural financing services in East Java, NTB and NTT. This effort was aimed to improve farmers capacity to buy quality agricultural inputs to increase their productivity.
In the second phase, PRISMA continues on from SAFIRA's work to achieve greater systemic change in the agricultural finance sector by offering a broader range of accessible and appropriate financial services.