Beyond Fishing? The Impact of Microcredit on Alternative Livelihoods in South Sulawesi, Indonesia

Key points in document

• The paper examines the connections between coral reef conservation, microcredit, and sustainable fisheries livelihood development.
• The Coral Reef Rehabilitation and Management Program (COREMAP) is a national initiative in Indonesia which aims to protect coral reefs and empower the communities that depend upon marine resources.
• One COREMAP strategy to reduce pressure on marine resources is a microcredit program which provides small loans for the development of alternative livelihoods to fishing.
• The microcredit program has achieved the development goal of increasing income, but has failed to reduce fishing pressure.
• The author concludes that microcredit projects must be able to support businesses that provide higher incomes than fishing in order to make the linkage between microcredit and biodiversity conservation in the region.
• To improve the microcredit strategy’s ability to support businesses, thereby creating an enabling environment for conservation, the author recommends addressing internal policies that affect business success and sustainability. This includes increasing loan amounts, strengthening partnerships with the private sector, funding positions for village COREMAP staff, holding regular loan repayment meetings, improving the flexibility of the loan repayment process, and shifting to a combined savings-credit approach.

Information relevant to Learning Questions:

Are enabling conditions in place to support a sustainable enterprise?

• Participants’ Livelihood Needs are Met: stakeholder alignment, diversification
• Market demand, access to credit/capital
• Governance
• Business alliances
• Financial management capacity, technical capacity
• Infrastructure
• Combined strategic approaches

Does the enterprise lead to benefits to stakeholders?

• Increased income for participants

Do the benefits lead to positive changes in attitudes and behavior?

• Behaviors regarding sustainable use of resources

Does a change in stakeholders’ behaviors lead to a reduction to threats to biodiversity (or restoration)?

• Biological resource use
• Pollution
• Climate change and severe weather

Does a reduction in threats (or restoration) lead to conservation?

• Marine ecosystems
• Species