South Indian Federation of Fishermen Societies

Micro Finance Programme

1. Evolution of the credit programme

The credit programme has evolved over the years with many changes due to external and internal compulsions. The following is a brief outline of the history of the programme.

a) Marianad Model: Linking marketing and loan repayment
In the early seventies, the Marianad Society (the first society of the SIFFS network) pioneered the concept of daily recovery from the fish sales of members for bank loan repayment. Since the members were selling the fish through the society managed auction system on the beach, and got paid for the fish by the society office, it was easy to make source deduction for bank loan repayment. A 10% deduction of the fish sales value became the norm for bank loan repayment. In addition, a 2-3% compulsory savings was also deducted for the benefit of the member, who could then fall back upon it during the lean season. This integration of credit, marketing and savings at the village level became the hallmark of the “Marianad model” which became the basis for the subsequent societies organised by voluntary organisations that were working with the fishermen. This idea remains the basis of all the 100 odd fishermen societies functioning in the SIFFS network today.

b) 1970s : Society-Bank direct dealings
In the 70s, the federation concept had not been evolved and the few primary societies that functioned developed direct dealings with the banks. Once the banks saw the functioning of the system, they were happy to lend to society members at the recommendation of the society. Long used to fishermen, who disappear after taking a loan, the banks were happy at the availability of a village institution through which they got a reliable link to the fishermen and achieve their “priority sector” targets. The loans were really small at this stage (Rs.1000-3000), and no security was required.

c) Early & mid 1980s : Federation as...