Publication:
Step contract structure for agricultural financing in Indonesia
Abstract
Agriculture is the third most significant contributor to GDP in Indonesia, because of its historic, cultural practice and favorable geographic location and fertile land. Agriculture still has immense potential for growth and providing an even larger national economic contribution. Unfortunately, the farmers, as critical economic agents fall into poverty and live far from prosperity. Farmers continue to live near and below the poverty line, and have difficulty getting access to capital, much less Islamic. From the perspective of government and institutional support, the agricultural sector requires funds to upgrade agricultural equipment, technology, and land. This research introduces a Shari ah compliant step contract structure that can be an alternative to provide access to capital for farmers, intended to support business growth and financial independence. To meet its objectives, the research uses literature review study, in-depth interviews, and Delphi methodology to gather expert opinion and to determine the Benefit, Opportunity, Cost, and Risk (BOCR) indicators to see the feasibility of step contract structure application in Indonesia. The overall results show that a step contract structure can be implemented in Indonesia with several terms and conditions. This research is expected to be an additional reference for Islamic financing innovation and contribute to the welfare of Indonesian farmers.
Keywords
Agriculture , Farmers , Step contract , Islamic finance , Indonesia , Project paper (MSc)
Citation
Rizqiyyah Al Husanaa'. (2021). Step contract structure for agricultural financing in Indonesia (Master dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3985
Publisher
INCEIF
Available in PDF format. Kindly email to kmc@inceif.edu.my to access the item