The presence of Micro- Agrobusiness Financial Institution (LKMA) can effectively increase farmer’s income. Asset loan of PUAP farmers group will increase farmer’s capacity access and capacity in purchasing seeds, fertilisers, and other facilities and infrastructure for production.
“The PUAP farmer group’s financial institution needs to be sustained, because it is effective in increasing the farmer’s income, even though the increase is relatively small, which is 5.03%,” said Secretary of local General Election Commission of Yogyakarta, Retno Setijowati, on Tuesday (1/8) at Faculty of Agriculture UGM.
Defending her dissertation entitled Effectivity, Efficiency, and Sustainability of Micro- Agrobusiness Financial Institution in Yogyakarta, Retno said the effectivity and sustainability of Micro- Agrobusiness Financial Institution from the institutional side can be seen as accumulations of assets, self-supporting level, and bad debts. Factors that affect positively to the asset accumulation and self-supporting level support the sustainability of the Micro- Agrobusiness Financial Institution, among others, are manager education, fund distribution for non-agricultural activities, credit selection, credit monitoring, and law enactment of credit payment, and more.
In order to develop Micro- Agrobusiness Financial Institution, some strategies are required, such as management capacity building through institutional training, good administration and management, and credit management. No less important is credit management for post-harvest activities and distribution.