Genesis of Bakari bank

Shared goat farming had been a way of acquisition of livestock related asset strategy in rural areas especially with socially and economically poor families. In most part of the country some form of lending productive asset exists. Goat farming had been one such area where asset had been most often acquired by poor families through leased by resource rich person of same village or near by village.

Our study findings showed that following two major ways of goat as an asset procurement is preferred by the poor goat rearing families -

• Purchase through own savings – Normally people purchase small goats or 1 to 3 goats and keep it over a period of time to increase herd size. Credit based goat acquisition has not been a major choice by goat farmers.
• Leasing or Batai system – This is the most prevalent system after direct purchase to acquire goats as Studies by The Goat Trust in Bihar, U.P and M.P revealed that leasing is better option for the poor goat farmers due to following reasons –

• Goat farmers did not have pressure of monthly repayment, as the cash flow from goat farming did not allow monthly repayment, goat farmers find leasing helps them as repayment pressure is not to be managed.
• Risk of mortality (which is significant in the area and estimated 23% annual) remains with lessor and lease can easily manage the risk.
• If production of goats gets delayed due to adverse climatic or management condition, both parties have to bear the loss.

Downside of goat leasing system–

• Quality of goats leased has been reported as inferior as person leased out only low quality goats.
• There is no written rules and agreement so very often lessor decides division in produce in their benefit as they are powerful and have social upper hands.

Bakari bank as integration of financial and non financial services

Based on above study findings, The Goat Trust built upon strength of traditional leasing system and improved it through integration of non financial services and giving it a formal agreement shape managed by local goat farmer’s collectives.
One of key innovation was making system transparent through live body weight based produce sharing and options to poor to return goats at any point of time and settle accounts. Ensuring quality goats and pregnant goats to ensure quick return had been one of fair practices promoted.

Model builds on integration of pro poor rural appropriate technologies, systems and community based service delivery. Community is central to the whole program.

The financial product integrated under Bakari bank along with micro leasing are –

• Leasing of quality goats and birds
• Livestock credit card for working capital management
• Community Insurance services
• Goat rearer’s group based Saving opportunities

The non financial products to be provided by proposed banks are –

• Door step preventative and first aid health services through Pashu sakhies
• Information exchange on sale and purchase in operational area and in between banks
• Price estimation through periodic live body weight measurement
• Training on improved practices
• Exposure for potential clients
• Pro poor Technology demonstration with key farmers
• Linkage with input supplier
• Facilitation in collectivization of marketable surplus (live animals, milk)

The Goat Trust is building on concept of breed village and promote future markets through estimating data of kids availability/ projections based on bakari bank success.

Existing status of Bakari Bank program

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Bakri Bank Photo Glimpse