Farmers in Rural India

Rural India is facing a cash deficit – Here’s how Social Investing helps

Leslin K Seemon
Jun 09

“My father was a farmer, we had a very small farm. Coming from a farmer background, I always wanted to give back to society and to the roots from where I came. When I saw Rang De’s Initiative last year, I felt it was really unique and since then I have been contributing my part.”

The communities in rural India are in despair. They have limited access to facilities and are looking into uncertainty as they wait for a better tomorrow.

On the 7th Edition of Impact Dialogues, we had three of our Impact partners sharing the experiences and challenges amidst the pandemic.

1. Action for Social Advancement (ASA)

Our Impact Partner ASA has been working on the development of livelihoods for smallholders, particularly tribal and other marginalized groups through – developing watersheds, minor irrigation, sustainable agriculture, financial inclusion, and promotion of smallholders’ organization for agribusiness. ASA currently works in nearly 1690 villages and with the intervention of Rang De they have been able to provide affordable credit to their community.

Ashish Mondal, Director at ASA, shared that rural India is undergoing a crisis. There have been no jobs and migrants have returned to the villages to be with their families. People are short on savings and are in complete distress. 

ASA has been actively working to generate livelihood options but the urgent need is to support families with funds so that they can continue to work in their fields. He shared that, Soybean seeds that are procured for sowing usually cost Rs 40-44/kg but now are now selling at Rs 102/ kg. If farmers fail to begin the new season on time they’ll definitely fall into debt. Social Investments can provide them instant credit at low-interest rates and help them steer through these tough times.

2. Seven Sisters Development Association (SeSTA)

SeSTA believes that communities on their own are capable of bringing sustainable changes in their own lives. They conduct different types of training for the community to enhance their self-belief and capacities. With the second wave in effect, the people in rural and remote villages of North East depended on ‘Varals’ or ‘Mahajans’, colloquial for money lenders for their credit needs. The interest rate charged on these typically small loans were often as high as 120%. This led to instability and disrupted cash flows.

Pradyut Chatterjee, Executive director at SeSTA shared that last year Rang De Social Investors funded 150 Farmers with instant credit that brought relief into the community. Especially, In the Chirang district of Assam, women farmers were able to secure food and meet their cash needs.

With the second wave in effect, the need for credit is urgent. Self Help Groups are low on funds and are looking for help. Social Investments can initiate cash flows and help mitigate the crisis.

3. Harsha Trust 

Harsha Trust has been working with Indigenous communities in the Southwestern part of Orissa. With the onset of the second wave, they are working to provide immediate relief to the community. Be it providing vaccination support, online support or spreading awareness on protective measures, our Impact Partner is keen to ensure livelihood options for the community.

Last year with Rang De’s Interest-free loans they were able to finance 1500 farmers with the help of social investing. A repayment rate of 100% asserted that farmers have the capacity to fetch for themselves, we only need to believe in their potential.

Rural communities engage in the cultivation of pulses, paddy and maize. Backyard poultry & rearing serves as an additional income and these are an integral part of their lives. With the second wave, many of them had to sell their bullocks, mortgage houses, and lease agricultural lands in order to meet urgent credit requirements. The amount they need is as small as 10-15k but failure to access finance makes them resort to such measures.

Social investments can help them make necessary amendments in their livelihood option and prevail until things get better. 
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