Inclusive crowdfunding scheme as capital source alternative for rural agriculture in Indonesia

Abstract

Fundraising through crowdfunding has great potential for agriculture sector capital, considering that the agriculture sector plays an important role in the economy and public welfare. The purpose of this study is to capture the existing condition of inclusive crowdfunding in Indonesia, and also aims to develop an inclusive crowdfunding scheme as an alternative capital for the rural agriculture sector in Indonesia. The slow development and participation of the public in crowdfunding in Indonesia is allegedly due to the low level of public literacy related to crowdfunding. A survey of financial literacy and inclusion in Indonesia states that people in Indonesia have low financial literacy index. The crowdfunding scheme recommended for the rural agriculture sector in Indonesia is combination of donation and debt-based crowdfunding (prosocial lending based), where crowd-investors will provide soft loans (zero interest). Meanwhile, the debtor who receives the funds must submit the participation funds to the crowdfunding platform, where it will be returned after the soft loans are paid off (adopting cooperation). Based on the results and discussions, it is recommended to the relevant stakeholders (government, academics, and further researchers) to support and make efforts to improve public financial literacy through their respective capacities.