Microfinance in the wake of natural disasters : challenges and opportunities

The author synthesizes the lessons learned from such situations and makes recommendations for donors, policymakers, and MFOs. The information presented in this paper was collected through an extensive review of the literature and targeted discussions with representatives of existing programs. The review placed special focus on Bangladesh, India, Burkina Faso, and South Africa. This paper gives particular emphasis to the following questions. (1) What conditions are required for MFOs to function effectively in post-disaster situations? (2) What services can an MFO successfully provide in a post-disaster setting? (3) What is the experience of new MFOs with post- disaster relief and reconstruction? (4) What do we know about the costs of MFO operations in a post-disaster setting? (5) What lessons can we learn about successful program design for post- disaster settings? (6) What role can an MFO play in protecting a community against natural disasters? (7) How successful are MFOs at protecting their portfolio against disaster? (Author abstract, modified)