Lessons Learned from Implementing Microfinance in a Post-Tsunami Environment (Sri Lanka)
Dec 2005, Steinwand, D.

Post-tsunami, what happened to microfinance provision and MFIs in the affected areas?

This presentation states that the tsunami affected livelihoods and microfinance activities in the following manner:

• In excess of 20,000 livelihoods were lost;
  
• Over 10,000 business units were affected;
  
• Around 27,000 microfinance clients were affected;
  
• Books and accounts were destroyed or damaged;
  
• Members who lost livelihoods were unable to repay loans.

The income recovery program implemented post-tsunami provided support in the form of:

• Cash transfers;
  
• Temporary employment;
  
• Economic activities.

According to the presentation:

• Pre-tsunami structural weaknesses of microfinance institutions (MFIs) have become more acute after the event;
  
• People who lost their assets may find grants more useful than loans;
  
• Actual demand for credit is not as high as some studies estimate;
  
• Credit lines with interest caps hardly reach the needy;
  
• It is too early to assess the effect of grant programs on the repayment culture.

The post tsunami challenges are:

• The quality standards of the external assistance;
  
• Better coordination amongst donors;
  
• Absorption of the money by the sector.

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Publisher(s):
Promotion of the Microfinance Sector

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