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Financial Inclusion and Microloans

Financial Inclusion and Microloans

In 2021, we examined ways to bring immediate assistance to the workers of the CoopXixuaú and their families, in a time when business was scarce due to collateral effects the pandemic of on the subsistence economy of the river-dwellers. We implemented financial subsidies in the form of a loan accessible to any members of the local Cooperative (men and women) of the Extractive Reserve (RESEX) of the Lower Rio Branco Jauaperi, without any conditions and with no interest. The Cooperative of Xixuaú (CoopXixuaú) gave access to loans within the RESEX that would generally be out of reach for the riverdwellers. To address this gap, we worked with our partners to provide a financial contract designed to fit the conditions of the workers of the CoopXixuaú and basic financial education. Each worker was eligible to receive up to R$900 (£140), for this pilot

Only 6 (of the 48 members of the Coop) receive a salary: they are either employed by the state and belong to three categories of workers: teachers, health agents and contracted agents from the energy company of Boa Vista. Most river-dwellers have multiple jobs such as fisherman, artisans, and guides (non-cooperative) achieved in the RESEX. This variety or as it was called by anthropologist Mark Harris the caboclo “repertoire” means that they can economically survive while performing those different activities. The mobility of river-dwellers also means that the city offers temporary work; a situation which was obviously undermined during the pandemic. It is more difficult for women to perform paid activities outside of their home; most rely entirely on the Coop work.

  1. "The microloan was important to us not only for the question of the alimentation but also for self-medication, to buy clothes for the children [..] To maintain the family during this difficult moment when we haven’t been able to work; to sustain our family. In my opinion, the form of payment is perfect because it is within our possibilities (economic) and it facilitated a lot (the process) for people here. (Alda, Professor, Gaspar, February 2022)
  2. "It helped a lot as an assistance, it "came from the sky" as we were without a condition to do anything. For me as a cooperados it was good. It was three months at R$ 300 and it has been good. For me, it helped me to buy aliments, aliments for the house and clothes that I bought for my daughter". (Thiago, Single Dad, Xixuaú, February 2022) *The information was obtained thanks to the financial director of the Cooperative, Aluísio Barroso do Nascimento. 

The microloan programme gave us a better understanding of the financial situation of the families of the Jauaperi (and the RESEX) and highlighted the importance of developing with the CoopXixuaú an economic and social agenda to improve the river-dwellers livelihoods and create alternative income-generating activities. Our research shows that a small household has a monthly spend of circa R$ 680 - £109 per month for basic necessities that we have divided in four categories: Food, Gas and Electricity, Fuel and Material.

Food is the highest item in the budget of the household (R$ 280). River-dwellers have switched activities, change diets and become highly dependent on urban commodities and rely heavily on urban markets for their provision of rice, coffee, sugar, oil etc. Their diet still consists of fish, meat game and farinha but even the traditional staple food is often scarce and bought from the market. An article suggested the paradigm of the river dwellers population who live in one of the most diverse biomes on the planet but suffer hunger during the rainy season when it becomes more difficult to fish due to the high volume of water in the area. We deliberately separated energy costs: gas/ electricity/ fuel for riverboats. The next expense in the budget is the energy (R$ 190). Gas, essential for cooking, is an important monthly cost for the families at R$ 120 every month. Until recently river-dwellers had access to free electricity thanks to a programme installed by former president Lula “Luz para todos”. Today, it has been replaced by the installation of electricity in every household, adding an additional cost to cash-poor families.

A family of four would need, in average, to allocate R$120 for their boats. River-dwellers are highly mobile either travelling between riverine communities or to the cities. Unfortunately, the inflation in 2021 was the highest registered in the last six-year and fuel prices are even higher in the countryside and in Manaus in comparison to the rest of the country. The material category includes fishing materials and batteries.

This analysis was really important to understand and quantify the need of river-dwellers families to access activities that can provide sustainable incomes. At the Amazon Charitable Trust, we need to think about innovative projects to reduce the dependence of market food and develop alternative trade channels between, for example, local Cooperatives.

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This graphic illustrates the monthly spend from a family of four people. (Price March 2022) FOOD: R$280 - £45 GAS AND ELECTRICITY: R$ 190 - £30 FUEL: R$ 120 - £19 MATERIAL: R$ 90 - £14.5

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