What problem did it address, where?
Recognition of the importance of microfinance as a crucial development tool for poverty reduction has increased during the last two decades. A general microfinance strategy involves the promotion of sustainable rural livelihoods and more equitable access to resources, particularly for vulnerable and disadvantaged groups, such as small-scale fishing and fish farming households. Microfinance programmes are seen as a means for such communities to gain access to much-needed and appropriate credit services.
The development objectives of microfinance for poor fishing communities are to enable fishing households to increase income, smoothen consumption, develop micro-enterprises, manage risks better and enhance earning capacities, thus reducing economic and social vulnerability. Because women constitute a significant proportion of poor fishing households, microfinance should also serve as an effective tool to assist and empower women in fishing communities.
Microfinance schemes help address the particular problems facing fishing communities:
- Fishing communities undertake small-scale capital commitments and levels of production and have limited political power. This makes them vulnerable to external threats, especially the large-scale fishing sector.
- Fishing communities are dispersed along coastlines and, because they depend mainly on marine ecosystems that are close to home, they are particularly vulnerable to resource depletions.
- The nature of the ecosystems and the particular species that are exploited are important determinants of many cultural characteristics, including the social and economic organization and the fishing gear and technologies that are utilized.
- The various fishing occupations that community members pursue will be interwoven through the whole fabric of a community's culture.
- There is a systematic division of labour according to both gender and age, with corresponding role expectations regarding men, women, children, adults and the elderly.
- In most communities, the primary producers are men, while women are expected to play a dual role: as mainstays of their household and children, and as mainstays of fish processing, marketing and distribution systems.
- Access to credit and insurance is problematic in most small-scale fishing communities and constrains fishing effort and production.
- Contemporary small-scale fishing communities are increasingly stressed by external problems, including expanding globalization, marine pollution and, in some regions, the growth of a coastal tourism industry.
FAO-assisted microfinance schemes have proven successful in fishing communities in Viet Nam, the Philippines, India and west African countries and relevant case studies are available.
Development of FAO Management Guidelines on Revolving Loan Funds and Credit Programmes for Fishing Communities provide principles and basic considerations on microfinance services to fisheries and aquaculture. Lending models, methodologies and policies are elaborated on that are applicable to fisheries while adhering to the best practices in the microfinance field.
Two case studies of FAO-executed projects incorporating microfinance programmes in coastal fishing community development in the Philippines and in small-scale aquaculture development in Viet Nam provide examples of how microfinance can contribute to the empowerment of women in fishing and fish farming communities, help alleviate poverty and contribute to the socio-economic well-being and food security of fishers and fish farmers.
Report of the National Workshop on Best Practices in Microfinance Programmes for Women in Coastal Fishing Communities in India. Panaji, Goa, India highlighted the positive aspects of microfinance projects in relation to government policies and initiatives, research, technology development, appropriate support services and other financial support and interventions for the fisheries sector.
Microfinance programmes can be adapted and adopted to all fishing communities, particular where poverty reduction is already integrated in national strategies.