Microfinance Institutions' Response in Conflict Environments

Paper
Date Published: 
Jun 2003
Author: 
Manalo, M.
Publisher: 

Framework and guiding principles for providing microfinance assistance

This paper presents MFI experiences in working in conflict- afflicted countries.

International development and finance institutions and NGOs are increasingly resorting to microfinance provision during risky periods when countries face crisis or conflict. Working in crisis or conflict-affected situations puts pressure on microfinance practitioners to respond to political and economic goals that may be inconsistent with their long-term sustainability.

This paper reviews experiences of the Savings and Micro Credit Program in Eritrea, Palestine for Credit and Development in the West Bank and Gaza and Micro Crédit National, S.A., in Haiti. It states that these MFIs:

  • Used the same disciplined practices that helped them succeed under normal environments, such as streamlined operations and commercial practices;
  • Understood that institutional development and progress towards self-sufficiency had to be delayed and exposed to high risk as conflict issues remained unresolved;
  • Recognized that their continued operations were contingent upon their ability to respond in a flexible manner to changing political and economic situations;
  • Realized the importance of getting support from their management, staff, Board of Directors and development partners to strike a balance between country requirements and institutional goals.
Type: 
Paper