Indonesia Market Assessment for Agricultural Value-Chain Payments via Mobile Technology

This paper evaluates the agriculture market for five types of crops: rice, maize, potato, chili, and palm oil in Indonesia for mobile value-chain payments. It also assesses and analyzes the gap between farmers and value chain actors on the existing payment system and how mobile technology can benefit agribusiness and farmers in the country. The paper makes the following observations:

• Mobile payment technology services have the potential for large scale with approximately 44 million farmers in Indonesia at the end of 2012. This number is projected to remain stable for the next few years in line with the stable growth of agribusiness sector in the country;
• Farmers in Indonesia still prefer cash for their payment transactions and have not recognized mobile payment services as an urgent need for business;
• Customer base is constricted as not all MFIs have the data about farmers in Indonesia;
• Indonesia is supported with telecommunication infrastructure and mobile wireless networks are started expanding as technical and financial innovations widen coverage to more areas;
• Cooperatives usually are not able to lend as much money as banks could provide.