Shaping the future of coffee value chain: governance and supply chain finance in West Java's specialty coffee

This study examines the relationship between governance structures and supply chain finance (SCF) in West Java's specialty coffee industry, focusing on regions with middleman-dominated versus cooperative models. Through value chain mapping, transaction cost analysis, and interviews with 85 stakeholders, the study found that governance structures critically influence SCF accessibility and effectiveness. Cooperative models, for instance, foster collaborative action that reduces transaction costs and enhances financial inclusion, whereas middleman-dominated chains are characterized by higher transaction costs and power asymmetries. A novel finding is that mobile fintech can significantly accelerate loan approvals in cooperative settings and that the unique quality differentiation of coffee can create collateral value. The study concluded that SCF interventions must be tailored to the specific governance structure of a value chain to promote financial inclusion and sustainable development, highlighting the need to move beyond a one-size-fits-all approach.