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The majority of Indonesian farmers are entirely dependent on the activities in the agricultural sector. However, the current agricultural system tends to works against farmers' welfare. This study aims to examine the role of local informal financial institutions in creating sustainable farmer welfare using a qualitative approach. The results of the study indicate that there is a dominant role of local informal financial institutions. This domination causes farmers to become helpless during harvest season, resulting in farmers' dependence on local informal financial institutions and their inability to enjoy sustainable welfare.

The role of local informal financial institutions for sustainability of farmers: a case study of Malang and Batu