Irvan Kolonas
    Category: Next Gen By : Ardian Wibisono Read : 4348 Date : Thursday, October 13, 2016 - 10:45:33

    Ahmad Zamroni / Forbes Indonesia

    Coming from a wealthy family, Irvan Kolonas, 28, had a good education and a promising career as chief investment officer at his family-related venture firm Celebes Capital. Yet three years ago Irvan decided to follow a different path: he set up social enterprise firm PT Vasham Kosa Sejahtera, operating as Vasham. The firm makes microloans to small, low-income farmers growing corn, and provides them with other forms of assistance and expertise. 

    In Sanskrit, Vasham means giving the people the power to change their destiny and that is exactly Irvan’s goal. Starting with only 100 farmers, Vasham has now helped over 7,000 farmers managing roughly 700,000 hectares of crops. Vasham also distributed more than Rp 35 billion of sharia-based microloans—an average of Rp 5 million a hectare—and improved the farmers’ annual income by an average of 30%. For his achievements, EY Indonesia last year named Irvan as the Social Entrepreneur of the year for Indonesia.

    Irvan’s family is connected to the agribusiness Japfa Comfeed (his father is vice president commissioner at the firm). Irvan worked at Japfa for two years after graduating in economics from the University of Southern California. Thus, Irvan is familiar with corn, feedstock’s main ingredient. While working there, he noticed partnership programs to empower corn farmers and boost production always failed. On the other side, Indonesia’s feedstock industry still imports roughly 35% of its intake.

     “I am interested in microfinance. Financing could be the problem since loans to the agriculture sector are small, and over 90% goes to palm oil. So I was thinking a financing company for the sector, and looking at Japfa’s supply chain, corn is the easiest,” Irvan says.

    In August 2013, Irvan began his venture, visiting corn farmers in Sumatra and Java, only to find they already had an informal financing from local middlemen called tengkulak. These middlemen often charge high interest rates for above 30%. These tengkulak also buy crops at low prices because they have bargaining power by providing the financing—thus farmers earn barely enough to survive.

    Irvan says Vasham operates like the tengkulak, except that it is fairer to the farmers. Instead of charging high rates, he favors a profit sharing scheme, which turns out to be sharia-compliant. Vasham takes only 10% of the profit, returning 90% to the farmers, ensuring they can make a living wage from their crops. To improve yield, Vasham provide training and technical support on farming practices as well as support for good seed, fertilizer and pesticides.

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