Rahn Financing As Access To Agricultural Capital: A Field Study At Bmt Ugt Nusantara Wongsorejo, Banyuwangi

Abstract

This study examines the role of rahn financing as an access-to-capital mechanism for agricultural activities among farmer-members of BMT UGT Nusantara Wongsorejo, Banyuwangi. Using a qualitative field research approach, data were collected through semi-structured interviews, direct observation, and documentation involving institutional officers and farmer-members. The findings show that rahn financing provides additional working capital for purchasing seeds, fertilizers, agricultural medicines, labor, and equipment, thereby supporting timely agricultural activities and production. The financing process is facilitated by relatively straightforward administrative requirements, collateral assessment, and timely disbursement. However, the effectiveness of financing is influenced by household financial pressures and agricultural risks. In particular, some financing may be diverted to urgent household needs, while crop failure caused by unfavorable weather can reduce agricultural income and subsequently affect repayment capacity. The study demonstrates that rahn financing functions not only as a source of additional agricultural capital but also as a short-term liquidity mechanism connecting production expenditures with expected agricultural income. Nevertheless, its practical effectiveness remains dependent on productive fund utilization, household financial conditions, and agricultural production outcomes.