Microfinance and disasters: Not what you expect

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.

Source: Parvin & Shaw (Disasters, October 2012).