Microfinance and Disaster Management

Proponents of microfinance often state that its primary purpose is to provide investment capital for microenterprise development so that clients can grow their income and assets. A complementary microfinance strategy is to assist clients to protect their income and assets from the impact of crisis events such as natural disasters.

Most microfinance institutions (MFIs) cannot ignore the possibility of being impacted by natural disasters. Many operate in communities and regions where natural disasters are an annual event. MFIs are in a unique position to help the poor protect themselves and their assets so that if disaster strikes, they can rebuild their lives. It is imperative for MFIs to make preparations for the impact of natural disasters on their clients and on the MFI itself. An MFI will be better placed to respond effectively when a disaster strikes if it has worked through the issues, designed policies and products, and negotiated collaboration with disaster management agencies, before disaster strikes rather than in the midst of it.

"Microfinance and Disaster Management" has been the subject of a program of curriculum development and train-the-trainer workshops. These resources are designed to help MFIs develop strategies for disaster preparedness, and to respond more effectively in the wake of a natural disaster.

FDC thanks all of the contributors to the resources provided on this website. FDC especially thanks our funding partner, the Citigroup Foundation, who gave a generous grant for the development of these resources as part of Citigroup's contribution to post-tsunami rebuilding efforts.

Summary Report (PDF - 61KB)