Post-Crisis Microfinance: Literature Review

This paper presents a synopsis of existing literature related to post-conflict and post-disaster microfinance. It analyzes how conflicts and disasters affect poor populations and MFIs, and the role MFIs should play in such situations in the short and long term. The paper also examines appropriate conditions and products for MFI initiatives in crisis-affected areas. Conflicts and natural disasters have similar effects on populations. They complicate customer access to small entrepreneurs, and decrease households' capability to earn, damage families' income-generating assets and increase household expenditure. MFIs suffer from liquidity crunch, capital loses and client default. Reviewed literature suggests that MFIs should:

• Not enter an area immediately following a crisis;
• Continue existing financial activities;
• Tailor products and approaches to specific contexts;
• Include possibility of repeated disaster or conflict in their long-term planning;
• Diversify, both geographically and in terms of income generation methods.