Transforming “Financial Inclusion into Sustainable Livelihoods”

1. Transforming “Financial Inclusion into Sustainable Livelihoods”

2. Financial inclusion is a process to ensure easy access and usage of financial sources for the rich and poor in the country. Financial inclusion means a group of people should participate in growth activities and help increase the economic growth of the country. Financial inclusion cannot be achieved by opening a bank account and granting a huge loan to single person. Many people have to open an account and save money regularly, so that loans to needy people can be granted on regular basis.

3. What is the transformation that leads to sustainable livelihoods?

4. Small saving, saving-based credit (group loan mostly for consumption) for income generating activities, payment services, insurance, linkage between credit integrated with noncredit inputs such as capacity building, self employment training, backward and forward linkages for sustainable development at household level in poverty sector.

5. Millions of people live on less than Rs. 100 a day. Financial inclusion must offer hope for a successful small business, farming, increased economic stability, better healthcare, housing, opportunity for education, and ultimately, the real possibility of self-sufficiency and independence.

6. Promoting Unskilled labours for Collection &Contract farming of Medicinal Plants towards Sustainable Livelihoods Himalaya Initiatives

7. Herbal Drug Industries Overtaking Agents Unskilled Labors Empowering WG / SHG / VHG Poverty alleviation MICRO FINANCE

8. Financial Inclusion in Herbal Drug Industry • Unskilled labours • 80% of herbal raw materials used in Indian industries are from wild collection • Unskilled labours are the backbone of wild collection of herbal raw materials • Unskilled labours expect/need daily wages • Depend on middlemen who collect fresh herbal raw materials from labours, process them and supply to wholesale dealers in cities • Price for fresh HRM is decided by agents

9. Why the dependence on local agent? • Credit/loan/advance from the agent • Only link between ‘market’ and collector • Inadequate information about price • Absence of alternative channels for selling herbal raw materials

10. Financial Inclusion in Herbal Drug Industry • Problems faced by unskilled labours • HRM collection is the only source of income • Need for daily wages • ‘Subsistence’ collection – the income generated from this source helps feed the family • Due to lack of savings, unskilled labors cannot wait for drying of HRM • Sells fresh HRM for the price decided by agents • Lack of available choices on microfinance • Lack of information on value addition • Lack of information on consumers

11. Microfinance to unskilled labours • Microfinance to finance food/family expenses • Microfinance for advance/credit (to eliminate middlemen) • Microfinance for buying packing materials Microfinance can certainly bring about tremendous change in the lives of unskilled labourers and can eradicate middlemen who dominate the herbal drug collection and fixe prices

12. How microfinance can help unskilled labourers? • Finance for food and daily expenses can help ‘sustain’ the family, allowing them to invest in value addition • clean and dry collected fresh HRM • sell processed HRM to the local agent for higher price • Finance for packing materials will further help value addition • Finance for advance and credit will help replace the local agent and allow them to produce to nearby wholesale dealer or corporates for a higher price

13. Financial Inclusion in Herbal Drug Industry • To whom and how • Instead of individual person it can be to • Women Groups • Self-Help Groups • Village Groups • Tribal Societies

14. Value-added training in addition to financial inclusion • Cleaning • Sorting • Grading • Minor processing • Powdering • Proper packing

15. Financial Inclusion in Herbal Drug Industry • Impact on livelihood • Debt-free • Freedom from local agents • Free from illegal & unwritten bonds/as bonded labour • Empowered to sell collected & processed RM at a higher price • Psychologically enthusiastic • Higher income – better social and economic opportunities for their children including better education • Sustainable collection

16. Financial Inclusion In Contract Farming Sector

17. Contract Farming is defined as a system of production and supply of herbal material produce under forward contracts between producers/ suppliers and buyers. The essence of such an arrangement is the commitment of the producer to provide a herbal produce of a certain type, at a time and a price, and in a quantity required by a known and committed buyer.

18. Major Benefits to Farmers in Contract Farming • Fair price • Buy-back guarantee • Removal of middlemen’s influence on price/commitment • Assurance of employment through the year • Timely availability of microfinance • Crop insurance • Relevant training for better productivity • Feeling of partnership in success

19. Benefits to Corporate Sectors • Uninterrupted & timely availability of Herbal Raw materials • Standard Rate of HRMs and thereby constant pricing • Long-term commitments & business expansion • Assured quality of Herbal Materials • Community development (CSR)

20. Himalaya’s initiative with GMCL • GMCL- an organization working with small and marginal women farmers for their economic empowerment • Partnered with Himalaya since 2004 • Collecting and cultivating herbs for Himalaya • Recently expanding the scope of engagement through value addition (semi-processing)

21. Impact of Himalaya’s partnership with GMCL • Project benefitting over 1800 women • 30% increase in income • Fair price for produce (covers cost and generates surplus income) • Training on GCP and GAP • Freedom from middlemen • Empowerment of women

23. THANK YOU