Interest free credit facility for Marginal farmers during COVID Pandemic
Osmanabad district is a drought affected area where women farmers’ income depends on agriculture. During the pandemic, farmers lost their agricultural income due to lockdown. Farmers’ savings were used for daily survival, so they didn’t have money to be prepared for the kharif session after lockdown. Due to lockdown, all credit facilities from agricultural societies and banks were stopped disbursement of loans to farmers.
Swayam Shikshan Prayog and its promoted women Producer Companies reached out to the NBFC bank and negotiated the financial product for farmers in Osmanabad. SSP representatives explained all the valuable work done by their Producer Company and farmers in Osmanabad for food and income security of marginal farmers. The bank officials got to know about these women farmers’ credibility on loan transactions, repayments and the impact generated by women after accessing the financial support from federations and SSK (the MFI associated with SSP). Also, they received the evidence of the Producer Company’s trust and relationship with farmers for future loan security. After all these efforts, NBFC bank agreed in partnership and signed the MOU with the bank. Company directors took the responsibility and submitted an application for the loan demand process by filling in online information about farmers with required information of farmers, a collection of all KYC documents and uploading each farmer’s profile.
As a result of this new partnership, 150 marginal women farmers accessed INR 30 lakhs (USD 41,000) without interest for a period of six months to do the agriculture in kharif season. The Company directors are exploring the collective market for their produce.
This story is an example of how building partnerships by MFI’s with local women’s institutions will give a chance for them to reach out to the last mile trustworthy consumers and create better impact on economic resilience.
Editor : Naseem Shaikh