Lessons from a microfinance recapitalisation programme

Following a major disaster, microfinance institutions (MFIs) often face high levels of bad debt, which may require the institutions to be recapitalised. This paper describes a recapitalisation programme implemented by the SANASA movement of Sri Lanka in 390 microfinance societies following the December 2004 tsunami, and highlights lessons for other similar programmes. MFI recapitalisation is a good use of funds in post‐disaster situations. To create successful programmes, donors should expect to relax some of their usual project requirements and MFIs should focus on maintaining credit discipline.     

The Economic and Environmental Outcomes of Microfinance Projects: An Indian Case Study

Microfinance projects now seek to achieve improvement in environmental quality in addition to poverty alleviation. Achievement of these goals may depend upon the economic and environmental impact of microfinance businesses. This study is a quantitative analysis of these outcomes for Ecodevelopment, an Indian microfinance project, which aims to prevent forest degradation by poverty alleviation. The study divides businesses into perishable goods, non-perishable goods, simple skills, and special skills and measures their economic outcome by two indicators, repayment percentage and continuity of businesses. The study examines the effect of loan amount on the economic outcome of businesses. To quantify the environmental outcome, it analyzes the use of firewood or fodder and release of pollutants by businesses. The results show that loan amount does not affect the economic outcome, special skills have best performance, and skills cause less pressure on forest resources. These results suggest the need for development of knowledge-intensive skills, involvement of institutions in the operations of business, and inclusive policies for protected area management.     

Assessing the impact of microfinance programming on children: an evaluation from post‐tsunami Aceh

This paper presents an evaluation of the long‐term impact of microfinance programmes on Acehnese children during the post‐tsunami recovery. The study, conducted from June to August 2010, examined the impact of microfinance programming six years after the tsunami. The sample consisted of 185 microfinance participants, with a comparison group of 192 individuals who did not participate in microfinance programmes. All respondents were parents, interviewed through a structured survey. The study used four child protection indicators—diet, health, childcare and education—in contrast to traditional repayment rate indicators. The primary results were insignificant with respect to all four child protection indicators, suggesting that, with respect to these indicators, there was no long‐term difference between the impact of microfinance on beneficiaries' children and non‐beneficiaries' children. These findings signify a need for microfinance actors to move beyond traditional indicators of economic success to evaluate the social changes microfinance programmes are presumed to effect.     

The changing emphasis of disasters in Bangladesh NGOs

Bangladesh is one of the most disaster-prone countries in the world, affected by cyclones and floods, as well as chronic hazards such as arsenic poisoning. NGOs have played a major role in bringing concerns related to risk management on to the national agenda and promoting a shift of focus from mere relief response to disaster mitigation and preparedness. The government has, after earlier scepticism, now accepted NGOs as major partners in these tasks. Innovative approaches, such as the use of microfinance, have been applied; many of which are related to preserving the gains of development efforts as part of rehabilitation. NGOs have pressured for better coordination with government. Improved structures are now approved, but it is still too early to judge their impact. Despite progress, neither NGOs nor governmental agencies have clearly defined roles in the effort to link disaster management priorities. This will ensure that longer-term development efforts build on local capacities and reduce vulnerabilities.     

Are SHGs catalysts of inclusive sustainable rural development? Impact assessment of SKDRDP interventions in India

The objective of this study is to analyse whether self-help groups (SHGs) play catalyst role in the inclusive and sustainable development of rural poor. This has been empirically examined in Indian scenario with a specific case of SHGs promoted by Shri Kshetra Dharmasthala Rural Development Project (SKDRDP), using secondary and primary data. A sample survey of 419 SKDRDP-promoted SHG members was conducted in Dakshina Kannada and Madikeri districts of Karnataka state in India. The data collected are analysed by adopting factor analysis technique. The results exhibit that SKDRDP-promoted SHGs contribute significantly to reforms in the society, enhance the capability of rural poor, and enable economic well-being and financial inclusion of the poor. Thus, SHG activities enable inclusive and sustainable rural development. The results have significant implications to the policymakers, non-government organisations, and local government organisations of underdeveloped economies.     

Microfinance institutions and a coastal community's disaster risk reduction,response, and recovery process: a case study of Hatiya,Bangladesh

Several researchers have examined the role of microfinance institutions (MFIs) in poverty alleviation, but the part that they play in disaster risk reduction remains unaddressed. Through an empirical study of Hatiya Island, one of the most vulnerable coastal communities of Bangladesh, this research evaluates perceptions of MFI support for the disaster risk reduction, response, and recovery process. The findings reveal no change in relation to risk reduction and income and occupation aspects for more than one‐half of the clients of MFIs. In addition, only 26 per cent of them have witnessed less damage as a result of being members of MFIs. One can argue, though, that the longer the membership time period the better the disaster preparedness, response, and recovery process. The outcomes of this study could help to guide the current efforts of MFIs to enhance the ability of coastal communities to prepare for and to recover from disasters efficiently and effectively.