Disasters and Conflict: Glossary

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Asset protection – Interventions designed to prevent the sale or consumption of productive assets after a disaster by transferring cash or assets (e.g., vouchers, food aid) to disaster victims. Also may include activities to physically protect natural and household assets and ensure access to larger-scale or group assets (such as land, water or group-managed facilities), as well as efforts to ensure that local laws and cultural norms do not endanger people’s assets.

Cash-for-work (CFW) – Short-term temporary employment usually lasting no more than six months, often focused on post-disaster reconstruction or other similar temporary jobs such as harvesting. Laborers are paid in short-term intervals for a specified daily wage. Projects are often community-identified activities. The overall goal is to generate provisional employment rapidly and inject cash into the community.

Cash grants – Cash transfers often provided to victims of natural disasters to assist with asset replacement and rebuilding. The challenge for relief agencies and microfinance providers is to design these interventions in such a way that they contribute positively to restoration of livelihoods, without creating dependency or undermining efforts to provide market-based financial services on a sustainable basis over the long term.

Client coping strategies – Specific efforts that households employ to address disruptions to their sources of income. Common examples of potentially negative coping strategies include reducing daily food intake, consuming cheaper food, reducing household expenditures on items such as clothing, medical care, and education, and reducing the number of dependents in the household.

Disaster management – An applied science that seeks, by systematic observation and analysis of disasters, to improve measures relating to prevention, mitigation, preparedness, emergency response and recovery.

Disaster preparedness – Steps taken to mitigate the effects of a potential disaster before it occurs. The aim is to build institutional and management capacity to respond effectively in times of crises. This includes policies, procedures and activities put in place before disasters occur to reduce vulnerability.

Disaster recovery – Both short and long-term activities that attempt to normalize social, economic and environmental conditions after a disaster.

Disaster response – Actions taken during and immediately after a disaster to try to minimize the negative impacts of the crisis.

Disaster risk reduction – A systematic approach to identifying, assessing and reducing the risks of disaster. It aims to reduce socio-economic vulnerabilities to disaster as well as dealing with the environmental and other hazards that trigger them.

Emergency liquidity facility (ELF) – Funding facility set up pre-disaster to provide access to liquidity for MFIs in case of emergency. Through an ELF, emergency loans are provided to MFIs to allow them to continue their financial activities without interruptions and overcome liquidity difficulties that occur after unexpected events. Before a disaster occurs, the ELF pre-approves existing MFIs for liquidity support through a detailed evaluation process in which MFIs must display a certain level of risk management practices and disaster preparedness. Following a disaster, the ELF will work with the approved MFIs to determine the level of support needed. Loans are then made to MFIs under pre-defined conditions.

Emergency loans – Loans offered to clients in good standing immediately after a rapid on-set disaster. Unlike regular business loans, the purpose is usually consumption and sometimes to help with replacing assets lost in the disaster. They are generally small amounts with short repayment periods designed to assist client in meeting immediate household needs.

Internally displaced persons (IDPs) – Persons or groups of persons who have been forced or obliged to flee or to leave their homes or places of habitual residence, in particular as a result of or in order to avoid the effects of armed conflict, situations of generalized violence, violations of human rights or natural or human-made disasters, and who have not crossed an internationally recognized State border.

Liquidity management – Activities within a financial institution to ensure that holdings of liquid assets (e.g. cash, bank deposits and other financial assets) are sufficient to meet its obligations as they fall due, including unexpected transactions.

Livelihoods – The capabilities, assets (including material and social resources), and activities required for a means of living. A livelihood is sustained when it can last through and recover from various stresses and shocks, and preserve or enhance assets and capabilities, while not undermining the natural resources base. Livelihood activities are enhanced by five basic assets with linkages to each other: natural, social, human, physical and financial capital.

Livelihoods intervention strategy – Broad and interrelated programs and policies which aim to help the poor improve their livelihoods by strengthening their five basic assets (see Livelihoods, above). Microfinance is an important component. Major interventions used by relief agencies for restoring livelihoods include grants (cash and in-kind), cash-for-work (CFW), distribution of tools and equipment to replace damaged and lost assets, and distribution of tools and equipment to diversify into disaster-resistant livelihood activities.

Loan forgiveness – A de facto grant to indebted borrowers. Loan forgiveness is not recommended as a post-disaster response and is not the same as loan write-off.

Loan refinancing – Disbursement of a new, usually larger, loan to enable repayment of a prior loan by a client who otherwise would have been unable to pay the originally scheduled installments.

Loan restructuring – Adjustment of the original loan repayment schedule to compensate for extraordinary events faced by the client. This procedure is called restructuring due to the loan taking on a new form and shape. The restructured loan will have different conditions from the original loan in terms of the interest rate, amount paid per month, frequency of loan repayments, term and/or collateral.

Loan rescheduling – Changing the payment schedule on an already existing loan so that it can be paid over a longer period, usually with a lower installment amount. Loans are commonly rescheduled to accommodate a borrower in financial difficulty and, thus, to avoid a default. MFIs usually choose between having clients continue to pay interest while the principal payments are postponed, or stopping the accumulation of interest until after principal repayment has resumed. Loan rescheduling is one type of loan restructuring (see Loan restructuring, above).

Loan write-offs (also called charge-offs) – The removal from an MFI’s balance sheet of delinquent loans which have been declared uncollectible. A write-off does not have any bearing on an MFI’s efforts to collect the delinquent loan or the client’s obligation to pay, and it is not uncommon for an MFI to recover loans after they have been written off. However, for accounting purposes, the outstanding balance of the loan is removed from the gross loan portfolio and from the loan-loss allowance. Thus the write-off does not affect the balance of the net loan portfolio, total assets, or any equity account, unless the loan-loss reserve was insufficient to cover the amount written off.

Most MFIs have policies requiring a write-off of all loans past due more than a certain number of days. After a disaster, MFIs often consider changing their normal policy to allow more time before loans are written off.

Local integration – One of the three "durable solutions" sought for refugees (voluntary repatriation, local integration, third-country resettlement). When voluntary return to their home country is not possible, refugees can sometimes settle with full legal rights in the country to which they have fled (also known as the country of first asylum). This is local integration.

Refugee – A person who has been forced to leave his/her country in order to escape war, persecution, or natural disaster.

Resettlement – Organized transfer (usually assisted by UNHCR) of an individual refugee or a group of refugees from a country of first asylum to a resettlement country, granting permanent protection and asylum. One of the three "durable solutions" sought for refugees (voluntary repatriation, local integration, third-country resettlement).

Returnee – A person who was a refugee, but who has recently returned to his/her country of origin voluntarily, safely and with dignity.

Subsidized credit – The provision of loans on the basis of interest rates and fees that fail to cover the full long-run costs of providing those loans.

Voluntary repatriation – The voluntary return of refugees to their country of origin, often assisted by UNHCR in close co-operation with the countries of origin and asylum. One of the three "durable solutions" sought for refugees (voluntary repatriation, local integration, third-country resettlement).


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