Banks should consider more flexible policies related to guarantees for farmers

Oct 13, 2025 by wbrum.org 128 views

Attitudes and Behavior of Rural Farmers in Making Decisions to Obtain Farm Credit Credit in Conventional Banks

Introduction

The agricultural sector plays a vital role in the economy of many countries, including Indonesia. However, the development of this sector is often hindered by the lack of access to financing for farmers. In this context, the study aims to explore the attitudes and behaviors of rural farmers in the Village of Gagagan Julu III, Sambal District, Dairi Regency, in making decisions related to farming credit. This study also wants to know the level of knowledge of farmers regarding farm loans and banking attitudes towards prospective customers who do not have collateral.

Methodology

The method used in this study is purposive area sampling, with sampling using the simple random sampling method that produces 30 samples. The analysis method applied is a descriptive method. This study aims to provide a comprehensive understanding of the attitudes and behaviors of rural farmers in making decisions related to farming credit.

Results

The results showed that farmers' attitudes towards farm loans were positive. As many as 80% of farmers use farm credit credit, showing that they have trust in utilizing this funding source to improve their agricultural output. The level of knowledge of farmers regarding farm credit credit is also very good, with 80% of farmers understand the concepts and conditions related to the credit.

However, banking attitudes towards prospective customers of farmers who do not have collateral tend to be negative. The bank refuses to give credit to those who do not have collateral, and prefer to recommend the use of unsecured loans (KTA) as an alternative. This shows the challenges for farmers who do not have assets to be guaranteed, even though they have the need and potential to develop.

Analysis

The importance of access to farmers' business loans for farmers cannot be underestimated. Farmers business loans are one of the main drivers in increasing agricultural productivity. The positive attitude of farmers towards the use of credit shows their awareness of the importance of funding to support farm business activities. Good knowledge about farm business loans also reflects that farmers have conducted relevant information to make the right decisions.

However, the challenges for farmers who do not have collateral are very significant. Banking attitudes that reject prospective customers without collateral can cause many potential farmers to be forced to postpone or even cancel their business expansion plans. Meanwhile, KTA as an alternative may not fully meet the needs of farmers, considering that there are usually limits in the amount of loans and interest rates that may be higher.

The Role of Stakeholders

In this context, it is important for stakeholders in the agricultural and banking sectors to find more inclusive solutions. For example, banks can consider more flexible policies related to guarantees for farmers, or develop a mentoring program that can help farmers qualify for credit. In addition, education regarding financial management and farm businesses also needs to be improved so that farmers can be more independent and competitive.

Conclusion

In conclusion, the attitudes and behavior of rural farmers towards farm loans showed great potential for the development of agricultural businesses in the area. However, the challenges in accessing financing for farmers without collateral require serious attention from the banking and government. By creating a more inclusive and supportive system, it is hoped that farmers can more easily access the farm loans needed to increase their productivity and welfare.

Recommendations

Based on the findings of this study, the following recommendations are made:

Banks should consider more flexible policies related to guarantees for farmers. This can include the use of alternative collateral, such as land or equipment, or the development of a mentoring program to help farmers qualify for credit.
Education regarding financial management and farm businesses should be improved. This can include the provision of training and workshops for farmers, as well as the development of educational materials and resources.
The government should provide support for farmers who do not have collateral. This can include the provision of subsidies or grants to help farmers access credit, or the development of programs to help farmers build assets and qualify for credit.
The agricultural sector should be more inclusive and supportive of farmers. This can include the provision of training and resources for farmers, as well as the development of programs to help farmers access credit and other forms of support.

By implementing these recommendations, it is hoped that farmers can more easily access the farm loans needed to increase their productivity and welfare, and that the agricultural sector can continue to grow and develop in a sustainable and inclusive way.
Frequently Asked Questions (FAQs) about Attitudes and Behavior of Rural Farmers in Making Decisions to Obtain Farm Credit Credit in Conventional Banks

Q: What is the main objective of this study?

A: The main objective of this study is to explore the attitudes and behaviors of rural farmers in the Village of Gagagan Julu III, Sambal District, Dairi Regency, in making decisions related to farming credit.

Q: What is the significance of access to farmers' business loans for farmers?

A: Access to farmers' business loans is one of the main drivers in increasing agricultural productivity. Farmers business loans can help farmers to improve their agricultural output, increase their income, and reduce their poverty.

Q: What are the challenges faced by farmers who do not have collateral?

A: Farmers who do not have collateral face significant challenges in accessing credit from conventional banks. Banks tend to reject prospective customers without collateral, and prefer to recommend the use of unsecured loans (KTA) as an alternative.

Q: What are the limitations of KTA as an alternative to conventional loans?

A: KTA (Kredit Tanpa Jaminan) is an unsecured loan that is provided by banks to customers who do not have collateral. However, KTA usually has higher interest rates and lower loan amounts compared to conventional loans.

Q: What are the recommendations for banks to consider more inclusive policies for farmers?

A: Banks can consider more flexible policies related to guarantees for farmers, or develop a mentoring program that can help farmers qualify for credit. Banks can also provide education and training to farmers on financial management and farm businesses.

Q: What is the role of the government in supporting farmers who do not have collateral?

A: The government can provide support for farmers who do not have collateral by providing subsidies or grants to help farmers access credit. The government can also develop programs to help farmers build assets and qualify for credit.

Q: What are the benefits of a more inclusive and supportive system for farmers?

A: A more inclusive and supportive system for farmers can help farmers to access credit and other forms of support, which can lead to increased agricultural productivity, improved income, and reduced poverty.

Q: How can farmers improve their knowledge and skills in financial management and farm businesses?

A: Farmers can improve their knowledge and skills in financial management and farm businesses by attending training and workshops, reading educational materials and resources, and seeking advice from experts.

Q: What are the implications of this study for the agricultural sector?

A: This study highlights the importance of access to credit for farmers and the need for a more inclusive and supportive system for farmers. The study also emphasizes the need for banks and the government to work together to provide support for farmers who do not have collateral.

Q: What are the future research directions for this study?

A: Future research directions for this study can include exploring the impact of credit access on agricultural productivity and income, examining the effectiveness of different types of credit programs for farmers, and investigating the role of technology in improving access to credit for farmers.