If No Alumni of IPB works in a Bank, Financing Fund for Agriculture Will be GettingSmaller and Smaller

Of 25 Trillion Rupiah ofthe financing funds disbursed by Bank SyariahMandiri (BSM), only 6.83% or Rp 1,772 trillion of the funds were allocated for agriculture. If no alumni of IPB is working on the bank, we are certain that the portion of the financing funds to be allocated for agriculture by the bank will be even smaller. This information was delivered by Hana Wijaya, Director of BSM, who is also an alumni of IPB in his presentation as a resource person at the Agribusiness Seminar theme“Role of Cooperatives and Business Development of Islamic Economics in Agriculture”. The seminar was held as a series of IPB Agrifuture Expo, programs planned to commemorate the 50th Anniversary of IPB, which is organized jointly between IPB and BRI Bank.
 

"Banks get difficulties toprovide funding for agriculture, partly because of the weakness of Micro business of Small and Medium Enterprises (SMEs), or our farmers do not accustomed to document or record of their productions and marketing. Those are reasons why small farmers unable to get funding from the banks, "said Hana. "Many agricultural businesses which operate in micro, small and medium enterprises are infeasible or feasible but haven’t bankableyet. Or they are feasible and they capable to pay by cash flow, but their business experience are limited to a very limited access to finance, lack of bank  guarantees, and lack of capital," he said.

According to him, the solution for unbankable SMEs is,that those SMEs should access to finance through government program that are facilitated by banks, or working with government banks / institutions for cash collateral guarantee program, optimization of CSR funds in cooperation with state-owned banks and institutions, the expansion of Islamic finance through a linkage program with microFinancial Institutions.

AdiwarmanKarim, chairman of theKarim Business Consulting and Aris Mufti, Chairman of the Expert Council of Islamic Economic Society (MES) who is also Alumni of IPB Agribusiness batch 19attended the event. When you add on farm and off farm, you will see that the financing provided by BNI SyariahBankto agriculture may be 45%. But contributionof on farm sector is smaller compare to off farm. For example, we do not operate  in cooking oil factory but in CPO mills, "said the man who once served as Deputy Director of Bank Muamalat Indonesia. He also shared tips for businesses to get financing from the bank, "Banker will transact with customers for business who are honest, intelligent and willing to spread the blessings. If they are unacceptable by their environment, they won’t get funding support from the Bank, "he said.(Wied).