Beyond Economic Benefits: The Contribution to Microfinance to Post-conflict Recovery in Asia and the Pacific

This paper describes the intangible benefits of microfinance, including:

• Looking at social mobilization, empowerment, stabilization, peace-building and solidarity, through social capital enhancement;
• Reviewing literature and draws lessons from conflicts in nine countries in Asia and the Pacific;
• Emphasizing microfinance experiments in Afghanistan, Papua New Guinea, Sri Lanka and Timor Leste.

The paper demonstrates that microfinance:

• Promotes conflict resolution, for example by empowering members to start their own organizations;
• Encourages domestic procedures that help people surmount conflict;
• Provides a way to bring people together, focusing on economic activities and cooperation rather than differences.

The paper states that when microfinance is provided to different ethnic groups, microfinance:

• Contributes to social and political reconciliation;
• Provides a forum for a unified voice for peace, with people cooperating and working towards a shared future;
• Encourages re-integration of refugees and demobilized soldiers by providing finance to mixed groups linked by joint liability.

The paper concludes that microfinance is also a tool to empower people by restablishing their trust and confidence in each other.