The Emerging Role of Microfinance Programs in Mitigating the Impact of Natural Disasters: Summary Findings of World Visions Ethiopian Affiliate

This progress note reviews the key findings of a study of WISDOM, the World vision Microfinance affiliate in Ethiopia. The study sought to assess the impact of WISDOM on socio-economic and nutritional well being of its members within the context of the 2002-2003 Ethiopian drought and food insecurity crisis.

The study followed the following methodology:

• A three-group, cross sectional survey design was used to study the relationship of participation in microfinance program, household well being and coping capacity of households in drought affected areas;
• Established clients were compared to two controls incoming clients and community controls.

The key findings of the study are:

• Greater diversification of income sources among clients;
• Increased land and home ownership among clients with likelihood of ownership increasing with length of participation in the microfinance program;
• Improved nutritional status in female clients, and in the children of female clients;
• Improved household diet in female clients;
• Reduced receipt of food aid among female clients.

The study concludes that:

• Microfinance programs that target female clients are more likely to have the greatest impact on household well being;
• Microfinance programs present an opportunity to increase population coping capacity and resistance, ultimately minimizing the negative impacts of natural disasters.