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Microfinance and ecosystems conservation How green microfinance interacts with Socio- Ecological systems Lessons from Proyecto CAMBio in Nicaragua and Guatemala

Author

Listed:
  • Davide Forcella
  • Guja Lucheschi

Abstract

Environmental degradation is the result of complex human-environment dynamics, often sustained by socio-economic inequalities. Recently microfinance has been proposed to be an interesting tool to support environmental protection strategies that aim at once to foster rural development and promote ecosystems conservation or adaptation to climate change. In this paper we provide one of the first analysis of the link between microfinance and ecosystems conservation. We base our analysis on the assessment of the first large-scale microfinance programme for biodiversity conservation: Proyecto CAMBio. Our empirical analysis exploits a unique set of secondary and primary data collected by the authors in Nicaragua and Guatemala. We introduce a theoretical framework and a practical methodology to assess such programme, and we apply it to our case studies. Even if with different peculiarities, the two cases studied show that microfinance for ecosystems conservation has good potentialities to introduce environmental elements in the rural activities of small farmers and in the products provided by microfinance institutions, and it is an interesting path to pursue. However, they also underline that choices and actions of rural households and local financial intermediary institutions are strongly influenced by habits and local dominant development pathways, which are among the main causes of socio-economic inequalities and environmental degradation. Green Microfinance per se does not seem to be able to revert such dangerous dynamics while, interacting with them without a proactive strategy, it risks to have no effect or eventually support the causes of environmental degradation. We then call for a renewed proactive role of green microfinance for ecosystems that, articulating with local actors and territorial dynamics, should aim not only at providing a green product to individual farmers, but instead support new alliances and collective, socially informed, actions to redirect the habits that support environmental degradation towards environmentally friendly and socioeconomic inclusive rural development.

Suggested Citation

  • Davide Forcella & Guja Lucheschi, 2016. "Microfinance and ecosystems conservation How green microfinance interacts with Socio- Ecological systems Lessons from Proyecto CAMBio in Nicaragua and Guatemala," Working Papers CEB 16-008, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/224879
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    References listed on IDEAS

    as
    1. Marion Allet, 2014. "Why Do Microfinance Institutions Go Green? An Exploratory Study," Journal of Business Ethics, Springer, vol. 122(3), pages 405-424, July.
    2. Johan Bastiaensen & Peter Marchetti & René Mendoza & Francisco Pérez, 2013. "After the Nicaraguan Non-Payment Crisis: Alternatives to Microfinance Narcissism," Development and Change, International Institute of Social Studies, vol. 44(4), pages 861-885, July.
    3. Marion Allet, 2012. "Why do microfinance institutions go green?," Working Papers CEB 12-015, ULB -- Universite Libre de Bruxelles.
    4. Ambrosio-Albalá, Mateo & Bastiaensen, Johan, 2010. "The new territorial paradigm of rural development: theoretical foundations from systems and institutional theories," IOB Discussion Papers 2010.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    5. Sievers, Merten & Vandenberg, Paul, 2007. "Synergies through Linkages: Who Benefits from Linking Micro-Finance and Business Development Services?," World Development, Elsevier, vol. 35(8), pages 1341-1358, August.
    6. Bastiaensen, Johan & Marchetti, Peter, 2011. "Crisis in Nicaraguan microfinance: between the Scylla of business for profit and the Charybdis of clientelism," IOB Working Papers 2011.04, Universiteit Antwerpen, Institute of Development Policy (IOB).
    7. Cranford, Matthew & Mourato, Susana, 2014. "Credit-Based Payments for Ecosystem Services: Evidence from a Choice Experiment in Ecuador," World Development, Elsevier, vol. 64(C), pages 503-520.
    8. Robert Hunter Wade, 2002. "Globalisation, Poverty and Income Distribution: Does the Liberal Argument Hold?," RBA Annual Conference Volume,in: David Gruen & Terry O'Brien & Jeremy Lawson (ed.), Globalisation, Living Standards and Inequality: Recent Progress and Continuing Challenges Reserve Bank of Australia.
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    More about this item

    Keywords

    Microfinance; Green Microfinance; Rural Development; Payments for Environmental Services; Agricultural microfinance; Central America; Proyecto CAMBio;

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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