Microfinance Post-Tsunami

This paper analyzes the first two years of Cordaid's experience in rebuilding post-2004 tsunami livelihoods in Indonesia, Sri Lanka, and India. Cordaid's credit implementation program operated on the following guidelines:

• Relief and rehabilitation phase should precede credit entry;
• Credit requires long-term engagement with the borrower and timeliness is important;
• Framework of livelihood restoration should focus on income generation and job creation.

Cordaid's experience yields lessons that may serve as guidelines for future post-disaster reconstruction of livelihoods. They include:

• Timeliness of credit builds on the pulse of relief activities;
• Synergy between emergency and entrepreneurship sectors is vital for effective delivery of relief and reconstruction interventions;
• Credit timing should ensure that target borrowers are ready to take loans;
• Loan vehicle selection is critical;
• Value of an external portfolio should be weighed against companies' capacity to revive on their own.

Finally, there is a no hard and fast rule in designing an appropriate post-disaster credit program. Common sense plays a crucial role, along with a keen analysis of the environment in developing such a program.