Talking Point

Agriculture still is a significant source of livelihood in the countries of South Asian region. The pressure on farm sector has however been increasing due to multiple reasons: lower yield, fragmentation of land holdings, poor irrigation, depletion of ground water, inadequate extension services / supply of inputs, poor post harvest management, lack of value addition at the producers level and a long supply chain involving a number of intermediaries. The resultant woes, unemployment / underemployment, migration to cities in search of a better life.    

There is a strong need to assist the farmers to increase productivity to move up the value chain in stimulating the farm economy and employment demand. Interventions such as, establishing market linkages, providing access to micro credit, creation of irrigation facilities/ rain water harvesting structures, efficient water use through micro-irrigation, managing natural resources efficiently etc. can generate better farm as well as non farm sector yields and change the rural landscape for better.

Dr. Subir Ghosh, who has worked extensively on the management side of agriculture and allied sectors, in his following series of articles, writes to offer sustainable agricultural practices in this context. 

Addressing the gap: It is in this background the integrated microfinance program extended by SIFFS to the sector appears to be noteworthy. The integrated microfinance model of SIFFS incorporating technology development and dissemination, support services for production and repair of marine fishing units, information services including location of fish stock, post harvest infrastructure, alternate livelihood and policy & advocacy needs a special mention towards its possible replication.    

For more information on the subject visit the website  http://www.nabcons.com/ReviewNabcons.pdf    

Services provided by SIFFS:   

SIFFS micro finance programme: By the mid-1990s, a major gap in credit availability had emerged as a combination of factors. Firstly, the banking sector had become less accessible due to the aftermath of the loan write-off scheme and the populist loan melas of the late ‘80s. The service area concept introduced in the late ‘80s also broke the relationships with some of the banks that had supported the societies. Secondly, fishing had undergone a transformation and most fishermen had started using marine plywood boats and out board motors pushing up the loan requirements to above the level for collateral-free loans. Thirdly, in some areas, the poor track record of SIFFS societies had also created difficulties for banks, in loan recovery.     

The district federations, which had the role of facilitating credit flow to the societies, responded by developing revolving funds (based on donor funds) and also put up collateral for getting bank loans for members. All this proved insufficient, especially in Kerala, as the societies were also facing competition from Government sponsored cooperatives, which were liberal with loans and subsidies without enforcing sufficient credit discipline. This led to a decline in the growth of the societies and even an erosion of membership in some areas.     

It is in this context that SIDBI approached SIFFS with its pilot programme in microcredit. SIFFS, which had not considered credit as part of its portfolio of activities, decided to take the plunge. After a slow start in 1997, SIFFS has since 1999, been putting a lot of effort into its microcredit programme and has emerged as a leading MFI in the fisheries sector. Today SIFFS has an outstanding portfolio of INR 86,651,935 in June 2009. The finances for these loans were sourced from SIDBI, SBI, Canara Bank, Indian Overseas Bank, Axis Bank and Cordaid, Netherlands as ECB. At the district and village levels, production loans are sourced from commercial banks. Funds under the SIFFS credit programme are meant for addressing the gap between the demand for credit and its availability from commercial banks.