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Surviving Disasters and Supporting Recovery: A Guidebook for Microfinance Institutions

This guidebook begins by noting that global experience demonstrates that Microfinance Institutions (MFIs) can profitably serve poor and vulnerable populations, enabling them to reach large numbers of clients. It points out that the majority of MFIs, however, remain challenged to develop the institutional capacity, client-responsive products, and business models to offer services sustainably. As clients’ repayment capacity declines, an MFI’s portfolio quality and liquidity situation position are put at risk. In the event of a a natural disaster, both the MFI and its clients become vulnerable.

The guidebook notes that experiences of several MFIs in disaster-prone areas, however, have demonstrated that access to microfinance services can support disaster preparedness and risk reduction by decreasing client vulnerability. When clients have access to needed financial services during crisis situations, the impact of the disaster may considerably lessen.

Provision of financial service during a disaster is only possible if an MFI is prepared. An unprepared MFI may not only fail to protect its clients, but puts its own survival at risk. Since the incidence of natural disaster is on the rise globally, many institutions have identified the need to prepare for this possibility for their own and their clients’ well being.

This guide seeks to assist MFIs in defining an institutional strategy for disaster preparedness. It lays out the steps for assessing the potential risk of disaster, the clients’ needs and the institutional capacity to respond. The report is based upon assessments and from this, offers a variety of recommendations for internal preparedness as well as examples of financial products that could mitigate the impact of disaster on clients. This guide also provides references to tools and guidelines which institutions may use in rolling out the strategies on which they decide.

As such, the guide is structured around the various phases for planning and implementing a disaster management plan:

• Assessment of risks
• Institutional preparedness
• Client preparedness
• Emergency response phase
• Recovery phase

The end of the guide includes a useful summary checklist. In addition, the guide itself is interspersed with various “activity” sections, particularly within the assessment and preparedness stages.

• Resource type Guideline
• Author 2005
• OrganisationWorld Bank Group
• Year of Publication2005
• RegionGlobal
• LanguageEnglish
• Number of pages51 pp.
• EditionDisaster Risk Management Working Paper Series