Smallholder farmers behaviour to access bank in an integrated crop-livestock system in West Nusa Tenggara, Indonesia

Abstract

Agriculture is one of the most important sectors to support household economy in West Nusa Tenggara (WNT), dominated by small holder farmers. This paper aims to provide insight on smallholder farmers attitude to access bank under integrated crop-livestock system in WNT. A survey was conducted in 2021 in East Lombok, Sumbawa and Bima districts covering 103 farmers. This study found that farmers in Lombok has less interaction with bank compared to Sumbawa and Bima. Reasons mentioned were afraid to be unable to repay, no collateral, and no need to loan. Conversely, farmers in Sumbawa and Bima have accessed bank loan for more than 5 years to support crops and cattle farming. This difference was also associated with resources. Average land and cattle ownership per household in East Lombok were much lesser than in Sumbawa and Bima, 0,4 vs 2 and 0,7 ha respectively, and 1-2 vs 4-5 and 5-6 head respectively. Loan for crops farming often get repaid from selling cattle. Hence, it is concluded that farmers with more resources are keener to access bank loan as they have back up from different enterprise for repayment. Cattle play significant safeguard role to repay bank loan in an integrated crop-livestock system.

Characteristic of Borrowers in Agribusiness Microfinance Institution Formed by the PUAP Program in Kendal Regency, Central Java-Indonesia

“…Farmers have limited access to formal credit institutions such as banks because of the complexity of the procedures, and they do not know how to propose credit or provide collateral [1][2] [3]. They depend on their source capital which is a minimal amount or lend to the money lender, marketing agents and input kiosks [4] [5].…”