Print

Case Studies and Anecdotes from Other Crisis

Pour le français voit à la droite - Para Español ver a la derecha.

For access please see top right to register. It is free and confidential.

Traductions de Google sont disponibles pour chaque page s'il vous plaît voir en haut à droite.
Laissez des commentaires en français, anglais ou espagnol et nous ferons une traduction humaine.

Disponibles traducciones de google para cada página, por favor selecionar arriba a la derecha el idioma.
Puede agregar comentarios en Inglés, Francés o Español, nuestro equipo se encargará de publicar la traducción.

This page has the objective of collecting post crisis MFI management experience that may not be found in formal literature. Personal experiences, unpublished or published case studies etc. are welcome.

Please footnote your text stating your experience and or citing the reference (e.g., article, book etc.).

Please also leave your email address if you wish to provide a personal contact for someone on the ground wishing further information.

You can add a document by click "Attach File" button below | Vous pouvez ajouter un document en cliquant sur le bouton "Attach File" ci-dessous | Puede adjuntar un documento haciendo clic en el botón "Attach File"

Some Tips/Observations from Conversations with Experienced Post Crisis Managers


1. Provide aid through MFI valuable distribution network, but keep aid work separate from MFI activities, appoint manager (often embedded aid organization worker).

2. Assess client’s financial and non financial needs as soon as possible. Reach out to aid agencies for meeting non financial and act as distribution agent (see point one above).

3. Source donation funds can be used for cash for work aid repairing client communities.

4. Expect three - five month period before any semblance of normality is regained

5. Keep business as usual as possible for non affected areas, appoint manager

6. Refinancing should be done on a case by case basis assessing client's income generating potential as per normal

7. Restructuring as point six above, consider modest no payment window (i.e., until market economy is running again).

8. Make sure you provide if possible psychological support for staff and clients. Some specialized aid agencies will provide professional services.


What should be the Terms and conditions of Rescheduling?


Terms and conditions must meet the realities of the disaster area

  • The disaster breadth and depth of damage should be considered in setting the length of the rescheduling period. For disasters that affect larger numbers of the population and have a larger effect on infrastructure, productive assets, and agricultural production, longer periods of rescheduling ate in order

  • Timing of the disaster will also affect length of rescheduling. In Asia, floods that hit shortly after planning may not have major impact on the final harvest, so clients dependent on agricultural income may be able to repay in the same crop season. But floods that hit just before harvest may wash away an entire crop, affecting not only agriculture products but also households that provide agriculture-related products and services. In this latter case, loans may need to be rescheduled for a longer period.

  • Timing of repayment should reflect an understanding of community cash flow patterns. Asking client to repay immediately after the harvest is likely to be successful. Asking clients to repay when other large expenditure come due (such as during feast periods or when school fees are due) are bound to undermine the MFI’s objectives.

  • Finally, the MFI need for liquidity is inevitably a variable that must be considered in deciding what form and length rescheduling will take.

Terms of Loan Rescheduling aft the 1998 Bangladesh flood.

The flood induced MFIs to reschedule loans for longer periods than ever. Some gave grace periods of over 6 weeks. Others less. Less than 30 percent waived interest on the rest of the loan period.

From Loan Rescheduling after a Natural Disaster, MBP Rapid Onset Natural Disaster Brief No.1, Microenterprise Best Practices, Development Alternatives Inc.


Lessons from Katalysis after hurricane Mitch in Central America

  • Suspend collection of interesting payments for a short period of time
  • if possible allow clients particularly those who are desperate to withdrawal forced savings without a penalty
  • do not give out new loans until the MFIs has completely assessed the situation and client
  • maintain the MFIs image as a professional financial institution. In general do not forgive loans.

Drawn from When Disaster Strikes, Katalysis


SEWA India

in response to the deadly Gujarat earthquake in 2001 SEWA provided emergency resources to its clients such as blankets, medical equipment, water etc. it also provided emergency funding for over 12,000 families to repair their dwellings.

Drawn from Microcredit in Post-Conflict, Natural Disaster, and Other Difficult Settings by Warner Woodworth Warner, Phd. Marriott School, Brigham Young University.

Samoa

South Pacific Business Development was able to secure funding from humanitarian agencies to provide clients with paid work for cleaning up their villages. The work paid minimum wage but gave households immediate income to survive on through the cleanup stage of recuperation making loan repayments less difficult.

Summary Tips

  • Assess liquidity needs and determine how to report to clients who want to deplete their savings
  • Determining whether or not to allow clients to temporarily halt participation in compulsory savings programs if they exist
  • Evaluating whether or not giving of emergency relief loans will be possible.
  • Estimating the number and percentage of clients that will seek cash advances on their savings accounts
  • Seeking grants and reimbursements from government and aid agencies for the extra assistance the MFI will provide
  • Finding new sources of capital to better cope with liquidity shortages.

Drawn from Microcredit in Post-Conflict, Natural Disaster, and Other Difficult Settings by Warner Woodworth Warner, Phd. Marriott School, Brigham Young University.



4 files attached