In view of this deficiency, the Central Bank stepped in 1998 to introduce a forward sale contract system to ensure an agreed price for the major agricultural crops produced by the farmer community. The enforcement of the forward contracts was done in terms of the provisions of Sale of Goods Ordinance enacted during the British Period. In terms of this law, people could get into sales contracts and violation of the contract by either party was considered an offence which would permit the aggrieved party to seek redress through courts of law. While the Central Bank provided the guidelines and the mechanism of the system by connecting the farmers to the would-be buyers of products, commercial and development banks functioned as facilitators, financiers and guarantors of the contracts. Initially, the major crops such as paddy, corn, onion, ginger and sesame were brought under the system. The success of the scheme could be gauged from the very negligible incidence of violating the contracts by either the farmers or the buyers during this whole period 27 . The system of forward sale contracts has led to the improvement of the quality of products as well. Since the buyers stipulated the quality specifications in the contract itself, the farmers had to change their production methods to meet the required quality standards. This change has specifically occurred in the case of producing paddy for seed paddy purposes and corn for producing nutritious pre-natal food requirement of pregnant mothers.
The underlying rationale is that a person who does not know how to save does not know how to spend money too. •  Beneficiaries were socially mobilised prior to providing funding so as to create solid customers for banks. This provided a permanent resolve to beneficiaries to go through the hard path of moving out of poverty. •  The group lending system consolidated into Development Societies at the village level and People’s Companies at the district level enabled the project to set up very vital networks in the form effective social capital. It also helped the project to ensure the sustainability of the project when both the foreign funding and Central Bank’s patronage were withdrawn. •  Skills and capacity development of the beneficiaries were conducted continuously in order to make them better entrepreneurs and bankable customers. This helped them to receive a continuous flow of funds for meeting their working capital and investment capital requirements. •  The group savings fund set up under each group helped to provide insurance to the beneficiaries in the event of unforeseen emergencies. In this manner, the beneficiaries were taught the vital lesson of self-reliance and self-accountability. •  The forward sale contract scheme introduced along with the project helped the beneficiaries who borrowed for agricultural purposes to enjoy a stable price system for major crops and be free from disastrous price fluctuations. References APRACA, Self Help Groups as Informal Financial Intermediaries, (1992), APRACA Publications, Bangkok.