During COVID-19 crisis, access to financing becomes an important aspect to ensure the continuity of food production. As one of PRISMA’s intervention to promote agricultural input financing for smallholder farmers, PT BISI International keeps disbursing YARO financing scheme which allows farmers to get access to in-kind credit in purchasing high quality maize hybrid seeds as well as good agricultural practice (GAP). This scheme enables farmers to pay half of the seed price, also optionally bundled with pesticides and herbicides, then finish the payment after their harvest.
Amid this pandemic, BISI managed their risk by working with existing agents with good payment history based on overall farmers’ YARO portfolio under their management. Besides, to reduce credit risk, YARO agents and BISI agronomists have actively shared GAP information to farmers in anticipating pest attack such as fall armyworm (FAW) that recently become one of major threats in the maize production. Since the attack also risked existing borrowers from some banks, BISI is currently preparing collaboration plan with Bank Negara Indonesia (BNI) Sumbawa Besar branch to utilize the good risk mitigation experience from YARO.
With strategy package of balancing financing disbursement with sound risk mitigation, BISI-YARO expectantly can help farmers tackle lower purchasing power issue hence they can continue production activities and further to maintain food security in the mid of COVID-19 disruption.