Members of the South Bandung Farming Cooperative have seen strong economic gains in the past two years, with productive loans rising by 38 per cent and sales volumes increasing by 43 per cent after the introduction of a digital business app. Cooperative head Aun Gunawan explained that easier access to financing allows farmers to expand their cattle ownership and improve their incomes, demonstrating how financial inclusion directly strengthens livelihoods. Founded in 1969, the cooperative has 5,000 members and produces 70,000 tons of milk a day, operating its own dairy plant and providing healthcare, veterinary services and banking to support its farmers.
The cooperative follows a holistic approach focused on the health of both farmers and cattle, as well as financial stability. The International Labour Organization is helping KPBS strengthen this model by using digitization to expand financial inclusion through a project implemented with national partners. With the new Enterprise Resource Planning system, farmers can track income, expenses and fodder costs, and receive 24/7 veterinary support. The app also records animal health data, improving milk quality by separating milk from recently vaccinated cows.
These digital tools have helped farmers achieve higher milk volumes and better prices, but the largest impact has been on access to finance. Since KPBS operates its own bank, the ERP system has made loan applications easier and faster, allowing the bank to review farmers’ financial data directly. More applications are now approved, and farmers no longer need to travel long distances or spend hours queuing, which previously discouraged them from seeking credit. This convenience allows farmers to focus on their cattle while still securing the financing they need to grow.
The programme also supports Indonesia’s broader goal of strengthening domestic food production, as the country currently imports most of its dairy products. Improving productivity among local milk producers contributes to national self-sufficiency and demonstrates a scalable model for inclusive rural economic growth. According to UN Resident Coordinator Gita Sabharwal, digital transformation and access to finance are central to Indonesia’s path toward high-income status and are key elements of the UN’s cooperation framework with the country.
Aligned with Indonesia’s development agenda, the UN-backed initiative supports financial literacy, SME digitization and decent work creation, as SMEs provide 90 per cent of the nation’s jobs. The approach is intended for wider rollout across Indonesia. Gunawan encouraged other cooperatives to adopt similar digital solutions, noting that farmers embrace technology when they see clear, practical benefits, as demonstrated through the support of the ILO and the UN.
