Leveraging Financial Inclusion for Forest Conservation: Availing VFC Framework in Karnataka

Abstract

Microfinance ecosystem, and Self Help Group-Bank Linkage Program (SHG-BLP), have developed in Karnataka over past two decades. With over 6000 SHGs in Village Forest Committee (VFC) villages, and aided by smartphone based information communication technologies (ICT), Karnataka Forest Department (KFD) is poised to leverage SHG-BLP. This study considers the extant VFC framework and proposes a technology-enabled intervention to boost financial inclusion in VFC villages to enliven dormant VFCs and promote forest conservation. In contrast to a classical creditseeking scenario in rural areas, the proposed intervention pivots on: women(and not men) as loan seekers; promoting credit for other than agriculture activities; banking activity in open space; and, social rather than physical collateral based on the embedded knowledge about the loanee with the community.