Financial Inclusion in Indonesia’s Fishery Sector: Factors Determining Credit Participation

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Nika Pranata


Geographically, Indonesia contains massive potential in terms of the fishery sector. Indonesia has the third-longest coastline in the world with a length of 54.716 km2. However, in 2015, the marine and fishery sector contribution to the Indonesia GrossDomestic Product was very low at only 2.5%. From January 2011 to August 2016, banks’credit disbursement to the sector was also extremely low at only 0.3% from total credit disbursement. Therefore, this study aims to ascertain whether the fishery sector in Indonesia is financially inclusive by investigating determinants of credit participation in for the fishery sector in Malang Regency of East Java and Cirebon Regency of West Java. Using logistics regression to analyse primary data obtained from 184 respondents, the study found that the ratio of income over expenses (a proxy of bankability level), asset ownership value, years of doing business, and a number of family members have a significant and positive effect on credit participation. Moreover, different types of jobs have significantly different probability in obtaining credit from banks. Fishermen have the lowest probability to obtain bank credit, whereas the highest probability belongs to aquaculture farmers. Interestingly, the level of education does not have a significant effect on credit participation as the average level of education in the fishery sector is considerably low. This study also provides specific policy recommendations to improve credit access and participation in the fishery sector to support its growth.


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PRANATA, Nika. Financial Inclusion in Indonesia’s Fishery Sector: Factors Determining Credit Participation. Institutions and Economies, [S.l.], p. 51-77, aug. 2019. ISSN 2232-1349. Available at: <>. Date accessed: 13 aug. 2020.