Indonesia’s dairy sector, which currently supplies under 25% of national demand, is set for a financing boost through a new partnership between the International Labour Organization (ILO) and the Indonesia Fintech Association (AFTECH). Signed in Semarang on August 12, 2025, the collaboration pilots a digital-credit model in East Java that integrates enterprise resource planning (ERP) data from dairy value chains with fintech platforms to build alternative credit scores and streamline access to working capital. Backed by the ILO’s Promise II Impact project—funded by the Swiss State Secretariat for Economic Affairs (SECO)—the pilot will run from August 2025 to June 2026 under the coordination of Indonesia’s Financial Services Authority (OJK).
The initiative will design tailored financial products for farmers and MSMEs, including asset financing, working-capital loans, and fintech-enabled credit lines, alongside training to raise digital literacy and financial management capabilities. With demand supported by policies like the Free Nutritious Meals Program, the program aims to unlock herd expansion, on-farm modernisation, and stronger collection and cold-chain logistics by making lenders more comfortable with real-time production and income data. AFTECH, Indonesia’s official fintech industry body (est. 2016), will advise on technology and broker partnerships with relevant providers, with an eye to replicability across other agricultural value chains if outcomes are positive.
Industry Insight:
For processors, cooperatives, lenders, and equipment suppliers, ERP-linked alternative credit scoring could shorten loan cycles and de-risk capex across chilling, fodder, and genetics—potentially lifting raw milk throughput in an import-reliant market.
Source : DAirynews7x7 Aug 16th 2025 International Labour Organization