Land Financing for Cocoa Farmers


Indonesia intends to become the largest cocoa producer in the world. Access to Finance (A2F) is one of the holdups in the sector, mainly
because of the limited availability of collateral and the low repayment capacity of the average cocoa farmer. Total production could be
increased through better inputs (e.g. fertilizer), better farming practices (pruning, sanitation, etc.) or increased land use for cocoa. For some
of those factors A2F is needed. Currently, only a few financial products are available, provided by the commercial banking sector, through government loan schemes or the cocoa industry. One promising option to increase production and income of cocoa farmers, developed by
Swisscontact and the private sector, could be realized by targeting professional and progressing cocoa farmers to finance additional land, either already with cacao trees planted or land without trees, where further investments are still needed. As professional we define cocoa
farmers with at least 1,000 kg production per hectare (compared to about 450 kg/ha for the average farmer).