Characteristics of Agricultural Commodity Financing Based on Warehouse Receipt System in Indonesia

Abstract

Agricultural commodities financing based on warehouse receipt system is empirically beneficial to support rural agricultural businesses. However, the success of the system is influenced by a number of factors. The objective of this study is to characterize the factors of the warehouse receipt financing system where it is implemented in agricultural commodity in Indonesia.  The research was conducted by means of a survey that collected data from respondents with knowledge of or experience on financing of commodities such as coffee, pepper, rice and maize. Partial Least Squares-Structural Equation Modeling (PLS-SEM) was used as the analysis model. The research results indicate that the warehouse receipt financing system suitable for development in Indonesia is characterized by social and commercial value. The product value must be supported by product attributes to ensure the availability, acceptability, accessibility, affordability and supply of information to provide awareness and trust in accordance with the values built in the financing product. This study can also prove that adding adaptability to product variables increases market acceptance.

Keywords: Agricultural Commodities, Structured Financing, Warehouse Receipt System

DOI: 10.7176/JESD/12-6-06

Publication date:March 31^st 2021