- In 60s, Indonesia imported ..tons of rice.
BIMAS as a brief
- The GOI tried to increase the national rice production by implementing BIMAS (Bimbingan Massal) or mass guidance, a new program aimed to increase rice production in order to reach rice self-suffiency by promoting Pantja Usaha Tani (five endeavors): (1) proper land preparation, (2) proper irrigation, (3) use of improved seed, (4) use of fertilizer, (5) use of pesticides; and at the same time connecting farmers with access to input by channeling loan package through BRI Unit Desa or village-level (agricultural) cooperatives and the last is mass guidance provided by agriculture extension services supplemented by university students.
Loan Package
- BIMAS' loan package consisted of pre-determined type and amount of inputs i.e. seed, fertilizer and pesticides.
- Inputs sometime inappropriate for local environment conditions
- Interest rate was subsidized by GOI; The subsidized interest rate hamper viability for the bank.
- The goals do not care about good governance and best practice in banking Industry.
- The decision, loan decision, is made by government official. In theory, BRI has the right in approving loan proposal but it is not the actual case.
- Loan package was tied to predetermined types and amount of inputs which sometime inappropriate for local environment conditions.
- Using inputs which can be dangerous to rice crop.
- Government policy for loan rescheduling was badly planned and often corruptly implemented.
- BRI's organizational structure was inadequate for effective supervision of the unit desa.
- BRI staffs were poorly prepared. No adequate trainings were given to staffs.
- Negative interest rate spread drove minimum success in saving mobilization.
Loan Process
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