Indonesia’s fisheries sector has long been regarded as having enormous potential to be recognized as the backbone of the country’s economy. Backed by abundant natural resources and unrelenting efforts from the Maritime Affairs and Fisheries Ministry, this year’s maximum sustainable yield is estimated to reach 9.9 million tons. Unfortunately, this potential is yet to be fully realized due to lack of access to financing.
This is where the financial service sector plays an important role in formulating a suitable solution to this problem. Last Friday (7/21/17), Mekar (PT Sampoerna Wirausaha) participated in a discussion titled “Opening Access to Financing for the Fisheries Sector”, which was organized by Bank Indonesia and attended by fishermen and fish farmers from the Thousand Island regency in North Jakarta as well as field advisors and officials from the local administration. Mekar was invited as a speaker to share some beneficial insights in the discussion.
Two other financial institutions were also invited as speakers in the discussion. Bank BRI talked about financing programs offered by banks for the fisheries sector while PT Permodalan Nasional Madani talked about financing schemes offered by state-owned enterprises (BUMN).
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Mekar, a fintech (financial technology) company that runs a peer-to-peer lending business, also offered its take on the solution to the financing issues faced by unbankable fisheries businesses. This is in line with Mekar’s mission and its business model, which focuses on the growth of micro, small, and medium-sized enterprises (MSMEs) in Indonesia.
Lack of access to bank financing is indeed a problem many fisheries businesses are still facing. The Indonesian Fishery Industry Association (Gappindo) shares this concern, saying in February that banks had yet to relax their lending criteria for the fisheries sector.
Data from the Coordinating Economic Ministry shows that in 2016, the realization of a government-backed micro credit program the People’s Business Loans (KUR) for the fisheries sector is extremely low at only Rp 1.14 trillion, making up a mere 1.2 percent of a total of Rp 94.4 trillion disbursed in loans last year. This is a cause for concern due to the fact that financing is vital for the 564,008 households that are running small-scale businesses in the catch fishery sector all over Indonesia in order to grow and expand their venture.
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Mekar offers a solution that uses an online P2P lending platform, https://mekar.id/en/, to connect investors who are looking to invest in small business loans with fish farmers in need of financing. Mekar does this by partnering with financial institutions such as savings and loan cooperatives. This ecosystem of service providers has proven to be effective in helping business owners in many different sectors who oftentimes face difficulties in getting a bank loan. With this solution, Mekar seeks to make it safer and more convenient for investors to invest in SME loans and help grow their business.
To date, investors in Mekar have financed more than Rp 2.8 billion in small business loans. For the investors, being an important part in the growth of small businesses run by Indonesia’s fishermen and farmers brings its own satisfaction. This means that the money they have invested truly brings a meaningful impact and change, and not only for the SMEs, but also for their respective community and the environment.