Transforming
“Financial Inclusion into Sustainable Livelihoods”
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.
What is the transformation that leads to
sustainable livelihoods?
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.
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.
Promoting Unskilled labours for Collection &Contract
farming of Medicinal Plants towards Sustainable Livelihoods
Himalaya Initiatives
Unskilled
Labors
MICRO
FINANC
E
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
• Why the dependence on local agent?
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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
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
• 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
• 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
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
• Value-added training in addition to
financial inclusion
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Cleaning
Sorting
Grading
Minor processing
Powdering
Proper packing
Financial Inclusion in Herbal Drug Industry
• Impact on livelihood
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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
Financial Inclusion In Contract Farming Sector
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.
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
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)
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 (semiprocessing)
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
THANK YOU