Linking
Community Forest Institutions
  with microCredit Issues


        Jitesh Panda
Community Forest Institutions
Community Forest Management (CFM) Groups
Federation of CFM Groups
Joint Forest Management (J...
Micro Credit Institutions
Self Help Groups (SHG)
SHG Federations
Self Help Cooperatives (SHC)
PACs
Farmer Groups
Banks – C...
microCredit and Community Forest Institutions


Informal – village focused
Male focused (Many mixed/ women initiatives
exi...
Linking microCredit Issues to Community
                  Forestry

Reaching the poorest – Forest dwellers are the
poorest...
Linking Community Forestry with micro Credit


microCredit recent phenomena WHILE
Community Forestry is old
microCredit Wo...
Linking Community Forestry with micro Credit


microCredit service led WHILE Community
Forestry access/control over resour...
Credit Needs of
Community Forest Institutions
Activities- plantation, protection, collection of
produce, value addition, i...
Let us Look Back
Has banks financed any Community Forest
Institutions for any purpose – plantation,
acquiring assets, NTFP...
microCredit and Community Forestry
Movement has always been moving on
           parallel lines

   There is a need for li...
Possibilities of Linkage
      – Points for Discussion
Savings services could be introduced in
Community Forest Institutio...
Possibilities of Linkage
      – Points for Discussion
We can motivate vibrant SHGs to take up
community forestry initiati...
Possibilities of Linkage
      – Points for Discussion
We can advocate that FDA grants be available as
credit reaching out...
Possibilities of Linkage
      – Points for Discussion
We can prepare and present financial
sustainability of individual/g...
Possibilities of Linkage
      – Points for Discussion
We need to promote credit based business plans
linked to forestry f...
Possibilities of Linkage
      – Points for Discussion
Advocacy efforts to earmark percentage of SHG
credit portfolio with...
Way forward
Further discussion on the issue linking
community forestry to microCredit
Demonstrating feasibility of Credit ...
Thank you
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Presentation on Community Forestry and micro Finance at IIFM Workshop

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Presentation on Community Forestry and micro Finance at IIFM Workshop

  1. 1. Linking Community Forest Institutions with microCredit Issues Jitesh Panda
  2. 2. Community Forest Institutions Community Forest Management (CFM) Groups Federation of CFM Groups Joint Forest Management (JFM) Groups Forest Development Agency (FDA) CFM/JFM Groups/Federations – Co existing Village as a whole - Forest Institutions Tree Growers Cooperatives Social Forestry led Community Institutions Other Community Groups involved in Forest related interventions
  3. 3. Micro Credit Institutions Self Help Groups (SHG) SHG Federations Self Help Cooperatives (SHC) PACs Farmer Groups Banks – Commercial, RRB, Cooperative mFIs – For Profit or not for Profit Traditional- Trade Linked, Employment Linked, Money Lender, Friends/Relatives
  4. 4. microCredit and Community Forest Institutions Informal – village focused Male focused (Many mixed/ women initiatives exist) Two tier Governance - usually At times large size Need not be enterprising as a group Dependant – User Right/Access to Resource Financially weak – less internal fund Not so well system of Book keeping/Accounting Individual Interest – indirect NOT directly linked to Group
  5. 5. Linking microCredit Issues to Community Forestry Reaching the poorest – Forest dwellers are the poorest Reaching to Interior Areas – Interior areas are forest predominant areas Poor Credit absorption capacity of clients – Many Forest related initiatives like plantation, protection, NTFP Value Addition need Credit Not livelihood led – Community Forestry provides opportunity Few Group based Initiatives – Most Community forest Initiatives are group based
  6. 6. Linking Community Forestry with micro Credit microCredit recent phenomena WHILE Community Forestry is old microCredit Women led WHILE Community Forestry Men led microCredit hamlet led WHILE Community Forestry is Village led microCredit found every where WHILE Community Forestry linked to Forest areas microCredit more formal WHILE Community Forestry is informal
  7. 7. Linking Community Forestry with micro Credit microCredit service led WHILE Community Forestry access/control over resource led microCredit Bank linkage led WHILE Community Forestry Forest Department led microCredit Credit led WHILE Community Forestry resource/livelihood led micro Credit surplus with funds WHILE Community Forestry deficit of funds microCredit externally driven (Global) WHILE Community Forestry internally driven (Local)
  8. 8. Credit Needs of Community Forest Institutions Activities- plantation, protection, collection of produce, value addition, infrastructure, marketing, storage, training or liberating forest dwellers from traditional exploitative credit linkage Grant for Community Forest Activities is fast declining –Hence need for Credit Investment in activities – Group or Individual based Working Capital – Group or Individual based
  9. 9. Let us Look Back Has banks financed any Community Forest Institutions for any purpose – plantation, acquiring assets, NTFP Value addition, marketing, etc Has banks financed any individual dependent on forest related livelihoods? Has banks financed community forest initiatives like working capital expense need for forest protection groups which could be repaid from income generated as usufruct right? Has banks financed community initiatives in plantation?
  10. 10. microCredit and Community Forestry Movement has always been moving on parallel lines There is a need for linking Community Forestry Institutions with microCredit
  11. 11. Possibilities of Linkage – Points for Discussion Savings services could be introduced in Community Forest Institutions Community Forest Institutions could be realigned to fit into framework of SHGs, exploring possibilities of Credit Linkage with banks We can advocate VSS/CFM groups be getting same treatment as SHGs – advocacy with apex microCredit institutions like NABARD We can separate business activities of Community Forest Institutions and promote them as SHGs or Cooperatives to be eligible for credit linkage
  12. 12. Possibilities of Linkage – Points for Discussion We can motivate vibrant SHGs to take up community forestry initiatives We can motivate mFIs/banks/SHGs to lend to individuals active in community forest initiatives in taking up livelihood enterprises We can motivate SHG members to join and take active part in Community Forest Institutions We can motivate members of Community Forest Institutions to join existing SHGs or form new SHGs
  13. 13. Possibilities of Linkage – Points for Discussion We can advocate that FDA grants be available as credit reaching out to more number of Community Forest Institutions demonstrating feasibility of credit led intervention to banks We can advocate on behalf of registered Community Forest Institutions like VSS and Cooperatives be eligible for credit linkage with banks We can promote higher level Community Forest Institutions/Federations to access credit for village based CFIs.
  14. 14. Possibilities of Linkage – Points for Discussion We can prepare and present financial sustainability of individual/group based forest activities to banks/microCredit related stakeholders We can motivate existing SHGs linking to SGSY to take up more and more forest focused/NTFP value addition activities We need to train functionaries of CFIs in book keeping and accounts to enhance their capacity – deserving further credit
  15. 15. Possibilities of Linkage – Points for Discussion We need to promote credit based business plans linked to forestry for SHGs and CFIs Linkages could be promoted with facilitation of voluntary organisations/concern village committee Two different Organisations involved in promotion of forestry and microCredit need to work together to facilitate linkages Gram Panchayat could be ideal platform for further higher level facilitation – from NTFP control point of view and increasing thought on SHG- Panchayat linkage
  16. 16. Possibilities of Linkage – Points for Discussion Advocacy efforts to earmark percentage of SHG credit portfolio with in priority sector/SHG sector lending for forest related activities While doing linkage either CFI to Credit or SHG to community forestry – important not to loose the core service Voluntary organisations need to take a lead in demonstrating feasibility of credit based forest related activities to wider community mainly to banks – could be done by mobilizing revolving fund/credit and on lending to forest/micro Finance groups
  17. 17. Way forward Further discussion on the issue linking community forestry to microCredit Demonstrating feasibility of Credit led Forest focused livelihood Interventions Demonstrating alternative community based models on linkages between community forestry and microCredit Facilitating/being proactive in promoting Community Forestry – microCredit linkages Advocating changes at policy level
  18. 18. Thank you

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