Indonesian Farmers to Benefit from Mekar’s Socially Responsible Investment Services
Investments can take many forms and seasoned investors are always on the lookout for the ones that fit their financial goals, risk appetite and time horizons. But in recent years, one particular question has been raised in conversations about finding the right investment alternatives: how can investments become something more, something meaningful that brings impact to communities and the environment?
This is what Mekar is trying to answer. Mekar (PT Sampoerna Wirausaha) is one of only two fintech companies in Indonesia that put Indonesian micro, small and medium sized enterprises (MSMEs) at the center of their business model. Mekar’s peer-to-peer lending platform lets investors invest in loans for small business, but not just any small business. In Mekar, loans are only awarded for businesses that have positive social and environmental impact.
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In keeping with that commitment, Mekar is signing an important agreement with Koperasi Mitra Dhuafa (Komida), PT Asuransi Central Asia (ACA), PT Syngenta Indonesia and several other parties to provide micro loans to hundreds of rice farmers in two regencies in West Java.
The signing of the MoU takes place on July 12, 2017, coinciding with the Cooperative Day, at the HARKOPNAS Expo, which is held in the city of Makassar in South Sulawesi. Under the MoU, Mekar will give funding to Komida and the latter will distribute the funding to at least 500 rice farmers in Purwakarta and Majalengka regencies in West Java.
The farmers can use the money to buy tools or other farming needs as well as a weather insurance policy, which will be issued by ACA. Syngenta Indonesia will distribute high quality seeds and pesticides and provide training to farmers to be able to implement its signature yield-boosting “Start Right” program. Farmers will also receive training in financial literacy.
The agreement is a pilot project; similar programs will be available in other regions if this one proves to be a success.
“Imagine connecting a farmer in Sulawesi with financing provided by a person who is now having lunch in Pacific Place, Jakarta. The two have never met. But Komida knows the farmer, ACA and Syngenta reduce the risk, and Mekar connects the financier via its technology. Together we have connected a new pipeline across Indonesia!” says Mekar CEO Thierry Sanders.
Sugeng Priyono from Komida says he believes this agreement will improve the welfare of the farmers in the program. The cooperative has been financing farmers in West and Central Java for the past two years and finds that farmers are facing serious problems from natural disasters leading to crop failures to the dominance of middlemen in the produce market.
“Komida hopes this agreement will provide solution to the problems faced by farmers, not only this program will encourage them to implement good farming practices, it will also help farmers maintain a stable price for their produce,” he adds.
This agreement is an implementation of the “Aksi Pangan” program, which was initiated by the Financial Services Authority (OJK) in March this year. The program aims to accelerate and improve access to funding in the food sector.
For investors in Mekar, this agreement is proof that their money goes to those who truly make a positive environmental and social impact. Mekar offers an investment alternative that aligns closely with our investors’ values without sacrificing returns — our investors earn an average of 10% annualized return. Learn more about socially responsible investing at Mekar.id.