Coastal indebtedness and impact of microfinance in marine fisheries sector of Andhra Pradesh

In Indian marine fisheries sector, Micro-Finance Institutions (MFI)/Self Help Groups (SHG) mobilised among marine fisherfolk play a vital role in reducing coastal indebtedness. The paper makes an effort to assess the extent of indebtedness among marine fisherfolk in mechanised, motorised and traditional fisheries sectors and impact assessment of MFI on coastal indebtedness based on the study carried out in two coastal districts of Andhra Pradesh. Situational analysis was done through PLA in selected locations and sample respondents were selected from mechanised, motorised and traditional sectors. Data were collected through personal interview from members of 12 selected MFI and nonmembers comprising a total of 600 respondents. The results showed that the level of indebtedness of members of MFI was less compared to the non members. The level of indebtedness was reduced to the tune of 75% after joining MFI in general. Even though the indebtedness was more in certain cases, repayment capacity significantly improved in members of MFI. There is an extreme necessity for strengthening the MFI ventures in the traditional fisheries sector in the state. A comparative assessment of sources of credit, purposes of credit and utilisation pattern of loans in the state was undertaken to draw valid conclusions. It was also found that the MFI ranked better in most of the major attributes in the perception of stakeholders compared to banks and non-institutional credit sources. Success cases of MFI on entrepreneurial capacity building which significantly played a role in debt redemption and poverty alleviation were documented as case models.