5th Regional Technical Dialogue on Scaling Sustainable Finance and Incentive Mechanisms to Support Producers and Smallholders

Indonesia Impact Alliance is delighted to be part of the 5th Regional Technical Dialogue on Scaling Sustainable Finance and Incentive Mechanisms to Support Producers and Smallholders held in Indonesia and Malaysia in Parallel.

Our Executive Director, Atika Benedikta, contributed to the dialogue by facilitating the theme “Collaborative Platforms and Public–Private–Philanthropic (PPP) Finance)”. The dialogue was co-organized with Tropical Forest Alliance, Indonesia Business Council for Sustainable Development (IBCSD), Cocoa Sustainability Partnership, PISAgro, and Solidaridad Indonesia.

In Indonesia, smallholders are highly significant producers, contributing 41 percent of palm oil and 95 percent of cocoa, yet they continue to face major financing gaps due to limited credit access, low green lending from banks, and fragmented traceability systems. Emerging regulations such as the EU Deforestation Regulation (EUDR) add new compliance requirements but also create opportunities for greater market access and strengthened sustainability performance. Scaling green finance solutions, improving digital traceability to meet these evolving standards, and expanding market access through long-term contracts and ESG linked incentives are essential to strengthen their bankability and sustainability.

A multi layered capital structure that blends philanthropy, guarantees, and insurance can help mitigate credit, business, and operational risks. Strengthening collaboration among banks, NGOs, and value chain actors will be key to unlocking more inclusive and resilient financing models for smallholders.