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Kochi Sept. 21

, Drastic changes have been brought about in the economy by globalisation, which require new ways of addressing traditional developmental issues, Mr Marc Soquet, Asia Coordinator on Social Protection and Informal Economy at the ILO, said.

Delivering the special address at the National Conference on Financial Inclusion organised jointly by the Institute of Small Enterprises Development (ISED) and the International Network of SMEs in Local Economic Development - India (INSLED-India), he pointed out that enhanced credit for the poor is essential, but it should be supplemented by other income generating opportunities and social safety nets.

There is much over emphasis on self-help groups and their role in disbursing credit. But credit disbursal should also generate enterprise development and social protection measures as well, he said. While the ILO focuses on such an integrated approach, several more innovative and enlightened models need to be explored and implemented.

In a similar vein, the seminar observed that policy statements and loan waivers were only short-term methods for dealing with farmers suicides, which required expert institutional mechanisms that can study the livelihood opportunities on the one hand and can educate the farmers on meaningful credit decisions as well.

There has been no respite from farmers' suicides in India, which continues to be a perennial problem. While enlightened and timely counsel has been advocated as a solution, no institutional mechanisms are in place to put this advice into practice. The conference concluded that an information system providing financial literacy is the primary requirement needed to address the root of the problem.

(This article was published in the Business Line print edition dated September 22, 2006)
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