MICRO CREDIT

SELF HELP GROUPS, WOMEN EMPOWERMENT & MICRO CREDIT 

Though the initial focus of the Federation was to ensure the socio-economic development of the traditional fisherfolk by making the producer fishermen become owners of fishing inputs, leading to enhanced self-esteem & income, it soon became evident that a sustainable economic development of the sector would be possible only through a continuous financial support mechanism. There is a huge requirement for working capital in the sector , as the fisherfolk are not amenable to the habit of saving. This unrestrained way of life leads to a condition of perpetual indebtedness. Daily consumption needs, requirement of short term working capital for fish vending, requirement for special needs such as weddings, educational requirements, medical contingencies etc. lead the fisherfolk to the informal credit system where loan sharks ruthlessly exploit their vulnerability. The exhorbitant rate of interest on loans in the informal system  results in the fishermen family getting caught ina vicious cycle of indebtedness from which they cannot escape. In order to address this need of the fisherfolk and prevent income erosion the Federation initiated the formation of the self help groups among fishermen family members and encouraged them to set up  micro enterprises.  Credit linkages with  National Backward Class Finance & Devopment Corporation (NBCFDC) and National Minority Finance Development Corporation (NMDFC) at 6% interest per annum was arranged for the SHGs. Interest free loans to fish vendors was also arranged with the  support of state government. In the last seven years Matsyafed could facilitate the formation of  15888 self help groups and could give a loan of about 256 crores as micro credit.

The present status of the self help groups and micro credit is given below.

Sl No

Particulars

Amount

1

Total number of self help groups

15888

2

Number of members in self help groups

191222

3

Thrift generated  by self help groups

18.94 Crores

4

Amount of thrift distributed as loan

117.01 Crores

5

Term loan distributed

81.90 Crores

6

Micro finance distributed

323.79 Crores

7

Interest free loan distributed to vendors

148.36 Crores

Total amount distributed to SHG's

519.26 Crores

The micro credit system has made a powerful impact  on the dynamics of the financial management of primary cooperatives and helped to improve the income of the fishermen families. While the interest rate of informal money lending in fisheries sector  ranges from 24 to 120% per annum , Matsyafed could organize the micro credit at 6% per annum and also provide interest free loans to  fish vendors. This has forced the money lenders to reduce the interest rate charged on informal credit resulting in overall  increase in the income levels of  fisherfolk.