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Innovative Replanting Financing Models for Oil Palm Smallholder Farmers in Indonesia

In order to evaluate existing financing models for oil palm smallholders and their potential to be replicated and scaled up, to enhance rural livelihoods and to foster deforestation-free farming in Indonesia, this study has reviewed current smallholder financing practices of TFA 2020 members and recent research in this area.

The starting point for the current study was a research paper published by CIFOR (Bronkhorst et al, October 2017) and a number of other publications. Also, the study has analyzed a number of smallholder financing programs developed by leading plantation companies and assessed the role of commercial banks, (impact) investors and the Government of Indonesia in this area. The findings of the study were gathered through extensive desktop analysis and interviews with senior managers and experts of some of the leading plantation companies and financial institutions in Indonesia.

More generally, this study has also reviewed the main prevailing challenges and issues related to oil palm replanting in Indonesia the perspective of smallholder farmers, plantation companies and other supply chain actors, as well as the Indonesian government.

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