27.11.2014 Views

State of World Fisheries and Aquaculture 2004 - Library

State of World Fisheries and Aquaculture 2004 - Library

State of World Fisheries and Aquaculture 2004 - Library

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

<strong>World</strong> review <strong>of</strong> fisheries <strong>and</strong> aquaculture<br />

65<br />

Box 6<br />

Micr<strong>of</strong>inance in fisheries <strong>and</strong> aquaculture<br />

Micr<strong>of</strong>inance can be defined as the provision <strong>of</strong> a broad range <strong>of</strong><br />

financial services, including loans, savings <strong>and</strong> insurance, to segments<br />

<strong>of</strong> the population who may lack access to traditional financial services.<br />

Most micr<strong>of</strong>inance programmes aim to promote <strong>and</strong> protect income<br />

<strong>and</strong> empower these population segments. More specifically, the<br />

development objectives <strong>of</strong> micr<strong>of</strong>inance for poor fishing communities<br />

are to enable fishing households to increase their income, smooth<br />

consumption, develop microenterprises, manage risks better <strong>and</strong><br />

enhance their earning capacities, thus reducing their economic <strong>and</strong><br />

social vulnerability. Because women constitute a significant proportion<br />

<strong>of</strong> poor fishing households, micr<strong>of</strong>inance can also serve as an effective<br />

tool to assist <strong>and</strong> empower women in fishing communities.<br />

The dem<strong>and</strong> for financial services in the fisheries sector is diverse<br />

<strong>and</strong> requires differential products <strong>and</strong> services. Micr<strong>of</strong>inance is just<br />

one means in the continuum <strong>of</strong> financial services provision to cater to<br />

that dem<strong>and</strong>. Characterized by small loans, micr<strong>of</strong>inance has inherent<br />

limitations in terms <strong>of</strong> financing the capital investment needs <strong>of</strong> the<br />

fishing industry. It should therefore supplement, not replace, traditional<br />

lending products from mainstream financial institutions, as the latter<br />

are still required to finance medium- <strong>and</strong> large-scale investment needs<br />

<strong>and</strong> priorities necessary for the growth <strong>and</strong> development <strong>of</strong> fisheries.<br />

Micr<strong>of</strong>inance programmes can be a powerful tool also in poverty<br />

alleviation. In the case <strong>of</strong> fishing <strong>and</strong> fish-farming communities,<br />

the alleviation <strong>of</strong> poverty is an important precondition for their<br />

participation in efforts to rehabilitate <strong>and</strong> conserve the aquatic<br />

environment <strong>and</strong> fisheries resources.<br />

levels:<br />

The mechanics <strong>of</strong> micr<strong>of</strong>inance operations basically involve three<br />

1. the borrowers who take out loans that they invest in<br />

microbusinesses;<br />

2. the loan delivery <strong>and</strong> recovery system;<br />

3. the institution or organization that manages the delivery system.<br />

The successful operation <strong>of</strong> these levels is premised on the twin<br />

principles <strong>of</strong> client discipline (where borrowers take responsibility for<br />

their decisions <strong>and</strong> agreements made with the lending institution) <strong>and</strong><br />

institutional discipline (where the lending institution <strong>of</strong>fers <strong>and</strong> provides<br />

products <strong>and</strong> services that are characterized by quality, efficiency <strong>and</strong><br />

commitment).<br />

A core principle that has been proved by successful micr<strong>of</strong>inance<br />

programmes is that the poor have the capacity to repay loans, pay the<br />

real cost <strong>of</strong> loans <strong>and</strong> generate savings.<br />

Source: FAO. 2003. Micr<strong>of</strong>inance in fisheries <strong>and</strong> aquaculture: guidelines <strong>and</strong> case<br />

studies, by U. Tietze <strong>and</strong> L.V. Villareal. FAO <strong>Fisheries</strong> Technical Paper No. 440. Rome.

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!