FOREST DWELLERS AND MICROFINANCE: EMERGENCE AND PROSPECTS (WITH SPECIAL REFERENCE TO KATNI, MANDSOUR AND SHEOPUR DISTRICTS OF MADHYA PRADESH, INDIA)
Free (open access)
Volume 5 (2010), Issue 3
313 - 330
S. TEKI, B.P. PETHIYA & P. BHATTACHARYA
Forest dwellers (FDs) depend on non-wood forest products (NWFPs), such as tamarind, for their survival, growth and socio-economic needs. FDs finance their needs during lean season by taking advances from traders of NWFPs against forward mortgaging of the forthcoming harvest of NWFP. This is called NWFPs advance trade, which is exploitative in nature. FDs do not have access to formal financial systems to finance their needs. Pre-determined pricing on account of advance trading of NWFPs is done lower than the market price of such NWFPs and is known as distress sale of NWFPs. To check this exploitation of FDs by traders, microfinance during the lean season should be extended to the FDs, so that they can wait till an appropriate time to sell their NWFP harvest for better price. This will in turn enable the FDs to adopt value additions at their level to get better price. A study has been conducted in Madhya Pradesh on emerging microfinance practices. Findings of the study indicate that of the total financing undertaken, traders account for 52.8%, relative and friends 20.0%, selfhelp groups (SHGs) 15.4%, while banks and government schemes account for 11.8%. Use based categorization indicates that the main purposes of microfinance to FDs are as follow: health and subsistence account for 23.2 and 21.5%, respectively, followed by marriage purposes at 18.1% and education at 15.2%. Awareness about SHG movement amongst the FDs is 65.7%. There is a gap between awareness about SHG and membership held by the FDs. Interest rates vary from source to source. Traders charge about 3.83% per month (p.m.), SHGs 2.2% p.m. and relatives and friends 2%. Mean size of SHG is 12 members per group, though the maximum can be 20 members. The frequency of SHGs meeting is once in a month, average contribution per member per meeting various from Rs. 10 in some groups up to Rs. 50 in others. Governmental organizations (GOs) and nongovernmental organizations (NGOs) should strengthen SHGs driven microfinance movement to bridge the gap and to increase dissemination of the microfinance movement. The institutional network, microfinance, marketing, technology, infrastructure development and other managerial interventions have to be augmented by all concerned GOs, banks and NGOs, keeping the local socio-economic aspects in mind, for effective and sustainable results.
forest dwellers, microfinance, NWFPs, SHGs