Green Growth Through Microcredit: The Climate Adaptation Potential of Indonesia’s Kredit Usaha Rakyat Policy
DOI:
https://doi.org/10.31685/ce45xk72Keywords:
Agriculture, Climate Change, Malmquist-Luenberger, People's Business Credit, Productivity, Technological ChangeAbstract
This study examines the correlation between the People’s Business Credit (KUR) policy and climate adaptation, as well as the promotion of green total factor productivity (GTFP) in Indonesia’s agricultural sector. Utilizing a balanced panel dataset covering 34 provinces from 2016 to 2023, green productivity was measured using the Malmquist–Luenberger Productivity Index (MLPI) with a Data Envelopment Analysis (DEA) framework. The empirical findings indicate that although the KUR policy is not significantly associated with improvements in agricultural GTFP, it exhibits a positive and statistically significant effect on technological change. Moreover, the positive impact of KUR on technological advancement is amplified under higher temperature conditions, underscoring its potential role as an instrument for climate adaptation. These findings suggest that KUR primarily operates as a driver of technological progress rather than as a direct catalyst for green productivity enhancement in agriculture, offering significant policy implications for aligning agricultural credit schemes with climate resilience initiatives.
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