Financial Literacy Intervention for Rural Farmers: A Qualitative Study on Collective Wealth Building through Simulation-Based Learning in Mekarmanik Village, Indonesia
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Abstract
The purpose of this study was to investigate the phenomenon of financial hardship experienced by coffee farmers in Mekarmanik Village. The study was conducted using a qualitative method with in-depth interviews with 50 farmers who are members of a cooperative over a 40-day research period. The research also uncovered the significant role of dealers and Ijon practices in worsening farmers' economic situation. Most of the informants were involved in transactions with bookies who offered high-interest capital loans or the detrimental ijon system. Results show that despite earning income from the coffee harvest, the majority of informants have difficulty allocating income appropriately for living needs. The main factors identified include low financial literacy, the absence of a financial recording system, and the inability to manage seasonal income. Limited access to formal financial institutions and the need for capital for the next cropping cycle traps many farmers in a continuous cycle of debt. Farmers ensnared in bonded labor practices lose a significant portion of the potential value of their crops. As an intervention, this study implemented a simulation-based learning program focusing on income management, and the development of access to microfinance institutions to build financial independence and reduce dependence on the exploitative ijon system.
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