Financial access of farmers and factors associated with the access: empirical evidence of banana farms in West Java, Indonesia

Abstract

Access to finance has an important role in managing agriculture. Farmers in Indonesia can access finance from different sources of finance such as from banks, micro finance institutions, government through farmers’ associations, buyer/traders, agricultural input kiosks, and from other sources of finance including family and friends. The objective of this research was to analyse the financial access of farmers and factors associated with the access. A survey was conducted to collect data especially from one hundred banana farmers in the centre of banana production in West Java, i.e. Cianjur and Ciamis District. The data were analysed using descriptive statistics and logistic regression. The results show that the majority of farmers had access to finance from government distributed through farmers’ association, and from family and friends. Furthermore, the results show that factors associated with the financial access of farmers differ among the sources of finance. Age and farming experience have statistically significant association with the access to finance from bank. Moreover, education and farm size significantly associate with the access to finance from buyer/trader.