MATEC Web Conf.
Volume 215, 2018The 2nd International Conference on Technology, Innovation, Society and Science-to-Business (ICTIS 2018)
|Number of page(s)||7|
|Section||Science to Business|
|Published online||16 October 2018|
The Constraints of Agricultural Credit and Government Policy Strategy
Institut Teknologi Bandung, School of Business and Management, Bandung, Indonesia
* Corresponding author: firstname.lastname@example.org
Low access to credit in the agricultural sector is also caused by problems of agricultural sector actors (especially farmers) and financial institutions. Farmers are still having difficulty in accessing credit (accessibility and unbankable) and the limited financial institutions that channel credit to the agricultural sector. Therefore, the government must issue a policy in growing the agricultural sector, especially in anticipation of access credit constraints by farmers. The agricultural sector as a high-risk business, therefore formal institutions are less interested in financing the agricultural sector on the grounds of high transaction costs, asymmetric information, low profits, lack of collateral, education of farmers is relatively low. In addition, most banks do not want to finance agriculture due to fluctuating production and uncontrolled price risk. While the constraints of the farmers in obtaining formal credit is a complex procedure, there should be collateral as well as high payment delay fees, long distances and less information about capital.
© The Authors, published by EDP Sciences, 2018
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0 (http://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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