Vol. 9, Issue 4, Part N (2025)

The present paper explores the potential of microfinance in Joint Forest Planning and Management (JFPM) on the socio-economic conditions and livelihoods of communities involved in Village Forest Committees (VFCs) within the Sirsi Forest Division, Karnataka. Data was gathered from the Forest Department about selected VFCs based on the benefits shared. Using a semi-structured questionnaire, the study examined the microfinance, its utilization and impact on social and economic conditions of people, involving 145 respondents selected through simple random sampling.The results indicate that among 145 respondents, only 27 (18.62%) benefited from microfinance provisions, highlighting a significant gap in accessibility. The utilization of funds revealed that 44 per cent were allocated to agricultural activities, with additional investments in self-employment (19%) and livestock acquisition (15%). The impact on income was predominantly positive, with 48.15 per cent of beneficiaries reporting a high impact, while 66.67 per cent noted positive social effects, such as improved living standards and social status. The limited reach of microfinance is attributed to insufficient funding and reliance on self-help groups for distribution, suggesting a need for structural reforms in service delivery. The findings emphasize the importance of enhancing financial resource availability and integrating microfinance with sustainable forest management practices to empower local communities and promote rural development. The findings underscore the importance of collaborative efforts between local communities and financial institutions to enhance financial inclusion and promote sustainable development in rural areas.