PasarMIKRO, an Agricultural Fintech company based in Indonesia, has recently raised USD2.5 million backed by Resolution Ventures and other notable investors. PasarMIKRO is a trade finance platform that enables farmers to get paid immediately and digitally, bringing them into the financial system. It provides bookkeeping, lending, and a marketplace for farmers and traders to move their produce.

Overlooked sector with a lack of digital infrastructure

The agricultural ecosystem in Indonesia is unorganised and fragmented with over 26 million smallholder farmers, micro/first-mile traders, and suppliers. Most participants do not have a footprint in the traditional financial ecosystem and are transacting and recording their activities with a pen and paper. Despite being a USD130 billion market and contributing 13% to GDP in Indonesia, the digitalisation progress in this sector has been lacklustre. Due to the trade structure, farmers also face challenges in working capital and delayed cash flows from the sale of produce, reducing their ability to reinvest into their operations.  

PasarMIKRO is set to change all that by providing smallholder farmers and traders a digital platform with and embedded financing solution. This helps them to scale their business faster and in a more sustainable way.

Bridging the gap between farmers and technology

PasarMIKRO is creating a digital platform for agricultural entrepreneurs to come together in one platform and marketplace. They provide a mobile application which consists of the tools and financing options for the traders and the smallholder farmers.

The marketplace will serve to increase liquidity for traders and farmers, offering aggregation, price discovery and optionality for the users. Traders will also be able to get access to trade credit while farmers get paid faster, allowing both to have more working capital to grow their businesses.

The transactional data that’s collected on the platform can be recorded and be used for data insights analysis to support financial, risk, and inventory management. Most importantly, this data will be valuable for building a traceable transaction history for credit scoring purposes, an important aspect for financial inclusion aspect that is lacking in the agriculture sector in Indonesia.

Since their pilot in December 2020, the company has onboarded nearly 1,000 famers, suppliers, and traders while disbursing over USD13 million to the farmers.

This round of funding will be used to expand the team to bolster its marketing and sales effort, and adding bandwidth to accelerate product innovation to augment product features. PasarMIKRO will continue to work with financial institutions to uplift the smallholder farming communities and expand their range of commodities products moving forward.

Sam Gibb, Managing Partner from Resolution Ventures said “We’re really proud to be able to support PasarMIKRO on their journey to improve financial inclusion for farmers in Indonesia. Their platform not only helps farmers to be paid more promptly but also gives them a digital presence, making other financial products and services available to a sector that has traditionally been cash based. The trickle-down effects from the work that they are doing to digitalise physical trade will flow through the other parts of the economy as well.”