Rural Finances

ONE of the common denominators of South Asian socio-economic situation is the widespread poverty in rural areas. South Asian countries are nations of villages. The majority of the population lives in rural areas. Since they constitute the bulk of the national population, it is fair to say that the countries are in effect nations of rural poor. Intense poverty marks living conditions in rural areas. A lot of thinking over the decades has gone into ways to address rural poverty. It has been proven beyond doubt that in order to uplift the rural masses out of poverty, infrastructural development alone will not suffice. The ruralfolks must have at their disposal ways to engage in productive exercises. For that, however, they need to have in their midst some kind of a willing financer. The rural poor’s financing needs are hardly fulfilled by urban-based banking system. They need the help of micro finance. Against the need for giving the rural poor access to financing, many countries in the South Asian region, including Nepal, have seen the growth of micro finance. Small savings and credit schemes have sprung up in many rural areas, hugely benefiting a large number of the rural poor.

But on which sector should the rural micro finance schemes focus on? Bankers and community workers from India, Sri Lanka, Bhutan and Nepal, participating at a seminar on cooperatives and rural financing institutions the other day, emphasised that the increasing productivity of agriculture should be a priority. Indeed, most of the South Asian population is agrarian. It is logical that interventions contribute to improve the agriculture sector and directly benefit the farmers. In fact, it is difficult to imagine South Asia coming out of the poverty cycle unless farmers are specially targeted for micro finance for a variety of reasons. Success stories of many farmers being able to increase their agro-income from a small loan received from the local community savings and credit scheme are aplenty. They have proven that all it takes is a little bit of financial pump to pep up a farmer family’s fortunes and those of a community. In order to improve the rural economy through micro finance, therefore, rural financing institutions and cooperatives must be further strengthened and expanded.

Roads’ Significance

APPROXIMATELY 44 kilometres of rural roads of various VDCs of Rautahat district, as per a news item carried by this daily recently, have been graveled at the cost of Rs.16 million under the community-based people’s participation programme. One of the reasons why the nation is still lagging behind other countries in the economic development sphere is because it is singularly devoid of any surface transport facilities worth the name. It’s not that there are no roads in the country. There are. In fact, more roads are being built each year, be they from the government’s side or more recently, by the people themselves. Especially by the villagers pooling their resources derived mainly from the yearly budgetary allocations set aside by the government for each of the over 4,000 VDCs in the country. Yet, the need to build more roads is always there if the nation is ever to expedite its economic development endeavours. But this, in a nation that is characterised by diverse terrain, is easier said than done. Even if the will and resources are there, the terrain still remains a formidable challenge. But not to come up with plans to construct roads by the concerned authorities just because of this challenge would be akin to suspending the nation’s economic development for an indefinite period. It could be for this reason that the concerned authorities have left no options unexplored to build more roads, particularly in the rural areas where the vast majority of the people eke out a subsistent level of livelihood. The construction of rural roads through the community-based people’s participation programme is a case in point.

Just as the saying "A single swallow does not a summer make", roads, per se, would and will not bring about the desired economic development in and around the areas where they meander through. Rather roads, at best, play the role of the much-needed catalysts in that they act as the ready conduits for the concerned authorities to take development efforts, materials and ideas to the doorsteps of the people. Undoubtedly, all these are indeed essential to uplift the people’s poor living standards. But if the people are to continue upgrading their low socio-economic status, then it looks to reason for the concerned authorities to not only take area-specific income generating schemes to such areas but also back them up with necessary inputs and extension services.