Effectiveness of Salam Contracts in Improving Farmers’ Personal Finance in Indonesia: Opportunities and Constraints.

Abstract Purpose - This research aims to explore the effectiveness of Salam contracts in improving farmers' personal finance through a qualitative case study. Methodology - This case study approach is taken to understand personal perspectives and experiences regarding the implementation of the Salam contract in farmers' daily personal finance, particularly in the context of their economic welfare and the challenges faced in their life. Findings - The research findings reveal that Salam contracts have great potential in helping farmers obtain upfront capital and price stability. However, there are various obstacles, such as limited knowledge about the Salam contract, production risks due to crop failure, and lack of infrastructure that supports modern agricultural technology. Practical Implications - Interviews also showed interest in Internet of Things (IoT) and artificial intelligence (AI) technologies that can improve productivity, although challenges in their application remain. Originality - The results of this study are expected to provide practical insights for the development of Salam contracts in the context of agricultural activities by considering technological support and education for farmers. It is believed that farmers’ ability to improve their financial administration would enhance their personal finance capability. Keywords: Salam, Farmers, Case Study, Personal Finance, IoT, AI