FAO has released a new Forestry Paper Microfinance and forest-based small-scale enterprises. The paper shows how microfinance can help low-income households living in forest areas start up and run their own small businesses. Giving poor forest-dwellers access to basic financial services is a key element in helping them improve their living standards.

The publication includes a number of success stories, including one from the Parbat District of Nepal, where 673 small-scale enterprises were set up under a microfinance enterprise development programme, creating employment in rural areas that depend on trade of non-wood forest products such as honey, allo (traditional cloth made from nettles) and lapsi (a fruit used to make drinks and candy). Some 669 of the businesses, or 99.4 percent of programme participants, paid back their loans in full.

The report describes the experience of two major innovative programmes targeting poor forest-dependent communities in Parbat district - the Micro Enterprise Development Programme (MEDEP) and the Livelihoods and Forestry Programme (LFP). Surya Binayee, Indu Sapkota, Bhishma Subedi and Laxman Pun co-authored the Nepali case study.

Full Report