Jakarta – The Financial Services Authority (OJK) has expanded the banks’ financing scheme with innovative and feasible ones to help Indonesia’s smallholders in implementing oil palm replanting program, which is mainly aimed to increase their productivity and sustainability.
“OJK seeks to implement a scheme of sustainable financing for smallholders’ replanting program in order to increase their welfare, protect environment and generate economic growth,” OJK Chairman Mahendra Siregar said in a written statement on Monday, 31 July 2023.
Mahendra said the palm oil industry plays a very important role in Indonesian economy. Despite the outbreak of Covid-19 pandemic during the last three years it continually saw a robust growth, while other economic sectors saw negative growth.
He said Indonesia is the world’s largest producer of palm oil, allowing it to have a large market share in the global market of vegetable oils.
“It’s still irreplaceable until now. That’s why we need to increase its productivity by providing financing for replanting the smallholders’ oil palm plantations,” said Mahendra.
According to Mahendra, as the top strategic commodity of Indonesia, the palm oil contributes significantly to Indonesia’s trade balance as its exports account for 13.50 percent of Indonesia’s non-oil-gas exports. The palm oil industry also contributes 3.50 percent to the total GDP of Indonesia.
As part of efforts to increase financial access for smallholders, Mahendra and his OJK team made a visit recently to the Palm Oil Mill (POM) of PT Tania Selatan (Wilmar Group) in Purwo Asri village, Lempuing Jaya district in Ogan Komiring Ilir (OKI) regency of South Sumatera.
He expressed his appreciation to the partnership program of Wilmar and oil palm plasma farmers for its achievement in generating local economic growth.
“The partnership has been implemented since 1993. Due to the partnerships, the smallholders can increase their productivity. Their productivity has doubled, and it will soon triple. It will certainly increase the farmers’ welfare,” he said.
In Bumi Harapan village, Ogan Kemering Ilir, South Sumatra, BPD Sumsel Babel, Bank BRI and Bank Mandiri had realized funding for smallholders at a total of Rp273 billion.
Agus Setiyono, representing the 326 smallholders grouped in the Cooperative of Mekar Abadi Mandiri, expressed their high appreciation to OJK for giving financial access to smallholders in implementing their oil palm replanting. (*)
Source: sawitku.id/REPUBLIKA.CO.ID,
