“Designing an Agro Industry funding alternative in Indonesiaregarding its profitability and sustainability using analogical business process design towards common money mutual fund scheme and Monte Carlo simulation approach”,
ABSTRACT
As an agrarian country nurtured by the vast potential of its agricultural sector, with its seemingly high proportion of 60% of population living from the sector, Indonesia’s agricultural sector has proven itself as a motor towards economic development, and moreover, in enhancing the quality of life amongst the society. Despite the great contribution towards the economic, agricultural sector is still deprived financially. The lack of funding has been one of the main issue hindering competitiveness and innovation—especially in this fast changing globalisation—for this potential sector.
ReksaDanaAgri is the designed framework in this research paper, implementable as an alternative funding resource towards agricultural sector in Indonesia. The scheme is built using analogical process on the typical money instrument’s mutual fund scheme. Mutual fund scheme is regarded suitable in bridging the gap between the funding needs and the enthusiastic investor market towards agricultar sector. Several issues had emerged on the initial design stage of ReksaDanaAgri’s scheme, including methods used on valuating investment in agricultural real sector, asset class design, its application on the company’s portfolio management as well as the scheme’s performance measurement method (its profitability and sustainability). Real sector investment valuation method is based on the defined typical instrument’s analogical business process, producer’s price ARIMA forecasting on each commodity, and risk-value simulation on the agricultural performance. Portfolio optimization method adopted in the scheme is based on Mean-Variance Markowitz method while Monte Carlo simulation is then run to test the scheme’s performance and risk exposure over time...