Does Integration Matter? Comparison of Credit Accessibility Between Integrated and Non-Integrated Livestock Farming

Abstract

People’s Business Credit (KUR) is a subsidized microcredit scheme launched in 2007 by the Indonesian government to improve small and micro-enterprise financing. This study examines KUR’s effects on livestock farm performance in Boyolali Regency, Central Java, focusing on credit access, productivity, income and sustainability. Using primary data from 55 livestock farmers in four subdistricts, and employed binary logistic regression to model credit access as a function of education, experience, family size, land area, group integration (dairy–crop systems), livestock number, and annual turnover. The result showed that education significantly raised the odds of obtaining KUR (odds ratio = 4.43), indicating that more educated farmers are better able to navigate formal credit programs. Farmers engaged in integrated farm groups (dairy–crop) also had higher likelihood of credit access, consistent with evidence that collective structures facilitate loan acquisition. In contrast, experience, family size, farm size, herd size and income showed no statistically significant effects. Notably, only 9% of the surveyed farmers had accessed KUR, underscoring low uptake. These findings suggest that policy and extension efforts should emphasize farmer education and cooperative/group-based approaches to improve credit accessibility. Strengthening farmers’ knowledge and promoting credit schemes through organized farmer groups (e.g. cooperatives) could enhance participation in KUR and thereby bolster the productivity and sustainability of livestock enterprises.