1. Linking
Community Forest Institutions
with microCredit Issues
Jitesh Panda

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. 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. 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. 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. 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. 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. 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. 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. microCredit and Community Forestry
Movement has always been moving on
parallel lines
There is a need for linking
Community Forestry Institutions with
microCredit

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. 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. 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. 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. 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. 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. 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. Thank you