Study of microfinance farmer to make decision for formal and informal credit

The study aimed to identify the microfinance implementation by horticultural farmers and analyze the factors influencing the horticultural farmers' decision to choose the financial institutions. The research location was carried out in two areas, namely (a) Wonomulyo Village, Poncokusumo Subdistrict, Malang Regency, dan (b) Pacet Village, Pacet Subdistrict, Mojokerto Regency. The sample determination was carried out using the Slovin formula using the proportional stratified sampling method. The total sample was 160 farmers. Descriptive and logistic regression analysis (logit) were used to answer the objective of the study. Formal institutions assigne¹d to channel the funds include government banks and private banks. Informal institutions that carried out micro-credit funds were the private sector or institutions from the farmers themselves. The majority of farmers knew that the rate level of formal financing sources was lower, but the administrative procedures were considered problematic. The regression's results showed that the factors influenced the decisions of Horticulture farmers to take micro-finance access, including education, length of business, interest rate, and loan amount.