World Bank study (2017) estimates that around 62% of the adult population worldwide has formal financial access. In Indonesia, the percentage of those with formal financial access is even lower, at 49%. Indonesia’s agriculture sector contributes only 6.9% of the bank credit portfolio; the majority of this credit goes to agriculture companies or big value chain actors in agriculture, not to smallholder farming households. Unwillingness and scepticism around servicing the micro-segment of the MSME market, difficulty and cost associated with accessing the historic credit data of smallholder farmers, and lack of awareness of suitable financial products and services are some of the reasons for farmers’ low access to finance.
SAFIRA collaborated partners to improve farmers' access to agricultural financing services in East Java, NTB and NTT. This effort aims to improve the quality of agricultural inputs for small farmers to increase their productivity.
In the second phase, PRISMA through the finance sector continues SAFIRA's works to achieve greater systemic change in the agricultural finance sector by improving the offering of a broad range of accessible and appropriate financial services.