Paper
Non-Financial Emergency Services to MFI Clients
Can MFIs engage in relief activities without decreasing their credibility as financial institutions?
4 pages
In the immediate aftermath of a rapid-onset natural disaster, some MFIs temporarily provide emergency relief services to clients or larger communities. This technical brief outlines why, when, and how MFIs engage in relief activities without downgrading their credibility as financial institutions in the eyes of current and potential customers.
Key points include:
- MFIs offer emergency relief services when they fear for the safety and health of their clients;
- Normally, MFIs should not be the first option in relief services, and should conclude as soon as the emergency period is over;
- Examples of MFI relief efforts include the Shakti Foundation and Grameen Bank following the 1998 flood in Bangladesh.
The paper cautions that MFIs should make clear that the relief efforts are temporary. They should take care to separate relief funds from operational funds. They should also evaluate whether they have the necessary informational, managerial, and human resource capacity necessary to respond to complex emergencies.
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