Strategy in Developing Microfinance Institution to Support Beef Cattle Farming Business in Rural Areas

Abstract

Microfinance Institution (MFIs) as informal financing institution has a big role in supporting the farmers' access to finance. This research was conducted to analyze the strategy for developing MFIs to support beef cattle farming. The instrument employed was a questionnaire delivered through a google form. In addition to questionnaires, interviews were also performed directly with key informants. Furthermore, FGDs and online seminars were conducted to formulate strategies for developing MFIs which were attended by stakeholders, including relevant government agencies, the Head of the Agricultural Extension Center, the Head and members of Gapoktan, extension workers, farmers, and academics representations. Data were analyzed using descriptive statistics and a SWOT matrix. QSPM analysis was also performed to analyze the priority strategy. The results revealed that MFI's have several strengths and weaknesses both from internal and external sources, particularly the opportunities and threats. The strategy formulated becomes a priority, which is to improve the role and position of MFIs in alleviating poverty and as informal financing institutions. The MFI's position is strong because it is easily accessible, has simple procedures, does not require collateral, and is located in a rural area. The strategy that should be applied is increasing the role of members with psychological and demographic relationships and the spirit of mutual cooperation still owned by rural communities. The sustainability of MFIs can support the development of beef cattle farming and help grow rural economies.