IPB University Students Demonstrate Three Models of Right Financing for Indonesian Agroindustry

Atika Ayuning Tyas, Putri Anisa and Deri Siswara, students from the Department of Islamic Economics, Faculty of Economics and Management, IPB University (FEM IPB) initiated a model of Islamic Financial Institutions (LKS) based on sustainable financing for agro-industrial development in Indonesia. The idea was successfully won 1st Place in the Call for Paper National Student Conference on Islamic Economics at Muhammadiyah University of Yogyakarta, Monday (25/3).

The background of the emergence of this idea originated from the large opportunities of Indonesia in agro-industry trade. Indonesia as a country that is fertile for agricultural products has the opportunity to master the global trade in agro-industrial products. But these advantages are not directly proportional to Indonesia’s competitiveness in the international arena, especially the Asia Pacific.

According to Atika, Indonesia’s agro-industrial products are still weak, even below small countries such as Thailand, Vietnam and Singapore. The making of sustainable products is the answer to these problems.

“That is because the global demand for sustainable products is increasing every year, which can become a market for Indonesian agroindustry products. The way to build sustainable agro-industrial products in Indonesia is by encouraging sustainable financing or sustainable financing, “said Atika

There is the principle relevance of sustainability in Islamic Financial Institutions (LKS), namely triple bottom P (Profit, People, Planet). So that Atika and the team formulated a financing model that could be carried out by LKS for the agro-industry sector.

The innovation of three sustainable financing models was initiated, namely the financing of waste treatment projects, Financing of Vegetable Energy Development and Plantation Revitalization (PPEN-RP), and productive endowments for agro-industry. The benefit of this idea is to be able to increase the inclusion and market share of Islamic finance, as well as the procurement of sustainable products and halal products as a distinctive feature of Islamic finance.

“Alhamdulillah, I am happy, grateful to be able to achieve this achievement. Actually the process is forming, the results and rewards are not the only ones expected, it is a bonus of a process. The most important thing is the process of gaining experience and learning, “added Atika. Atika hopes her ideas and team can really be applied and can advance Indonesian agroindustry. (NR)