Are Mfis and their Customers Reactive to Disaster Risk? Main Topics and Four Case Studies

Microfinance Intermediaries (MFIs) in poor countries are particularly exposed to natural or man-made hazards affecting both them and their clients, especially when risks are covariant. These risks have been gaining interest, especially after the occurrence of the Asian Tsunami in 2004, but have not yet been sufficiently acknowledged. Literature and applied research fall short of general conclusions; on the practitioners’ side, protection, prevention and management strategies are complex and costly. Therefore, MFIs are often unable to face these risks and their potential to deal with consequences has been poorly explored. External support - donations and technical assistance - is often provided to MFIs to recover from contingent situations. This study addresses the following questions: are MFIs and their customers reactive to disasters? Are MFIs willing and able to apply their own survival strategies? Do these strategies depend on other public or private recovery measures and what is the least distorting course of action for governments and donors to favor the recovery of MFIs? The study elaborates on existing literature and reports some evidence on four countries: Ethiopia, Madagascar, Sri Lanka, Sudan.