What is microfinance?
Microfinance refers to credit, savings, and insurance offered to low-income groups who have limited or no access to formal financial services.
Why microfinance for small-scale fisheries?
- Small-scale fishers generally operate in remote areas where it is difficult to obtain access to common banking and credit services.
- No collateral, cannot access credit from formal financial institutions.
- Need working capital for fishing operation: fuel, gear and ice and socio-economic well-being such as housing, education, medical and emergencies
Microfinance Institutions (MFIs) in Thailand
- Formal MFIs controlled by prudential regulation include commercial bank, and specialized financial institutions (SFIs); Bank of Agriculture and Agricultural Cooperatives (BAAC) and the Government Saving Bank
- Semi-formal MFIs refer to institutions have legal status; cooperatives, Saving Group for Production and village funds.
- Informal MFIs refer to individuals or juristic providers with no legal status namely, savings groups, self-help groups, and money lenders
Example: MFIs for Small-scale fisheries in Thailand
- The Village Fund is the microfinance program, established by the Thai government to provide THB 1 million to the village for allocating a soft loan with low interest for the local people to access this loan to improve their livelihoods and occupation.
- BAAC established by government grant loans to agriculture and its sub-sector including fisheries
Financial Program Support Small-scale Fisheries in Thailand
- The Government of Thailand provided the financial assistance amount THB 5,000 for 3 months for the registered small-scale fishers and farmers to alleviate the impacts of the COVID-19 pandemic.
- The Loan Project to enhance liquidity of artisanal and commercial fisheries
The microfinance is one of effective tools for supporting small-scale fishers to maintain and enhance their fishing activities in a sustainable manner and support the fishing households in undertaking self-employment and providing small capital to the people in the fishing communities for their socio-economic needs related to the quality of life and food consumption during the off-fishing season
