Disaster Management Overview

No part of the world is immune to disaster, whether natural or manmade. However, developing countries and poorer communities, which are the focus of most microfinance institutions, are much more vulnerable to such crises. Without solid infrastructure, government safety nets, insurance or long-term savings, many poor people are at greater risk when disaster strikes. MFIs need to be prepared to assist their clients through the process of economic recovery while also maintaining their own financial viability.

From floods to fire to war, the breadth of natural and manmade disasters confronted by microfinance service providers over the years has prompted much thinking on appropriate and effective industry responses. Though every crisis is different, common guidelines on emergency preparedness and responses can assist MFIs before and after disaster strikes.

During regular operations, there are important steps an MFI can take to ensure it is as prepared as possible for disaster, such as developing a crisis management plan. Immediately after a disaster, many quick decisions must be made and actions taken, from finding and supporting staff to starting relief activities and conducting rapid portfolio reviews. Then, once initial relief efforts are underway, groundwork must be laid for more long-term recovery and economic development.