Microfinance During and After Armed Conflict: Lessons from Angola, Cambodia, Mozmabique and Rwanda

Publication Date: 2001
Published by: Concern Worldwide and Springfield Centre for Business in Development
Document Type: Paper

View this Document   Email this Document

Security is the most important factor in the supply of semi-formal microfinance

The paper presents the findings of qualitative research work done between June and August 2001, in Angola, Cambodia, Mozambique and Rwanda to test the following hypotheses:

• Fulfilment of Doyle's minimum requirements ensure satisfactory conditions for the supply and demand of microfinance (MF) products;
• Fulfilment of Doyle's preferred requirements ensures satisfactory conditions for the supply and demand of sustainable MF;
• MF products strengthen household coping mechanisms during and after conflict;
• When choosing a MF product, clients prefer those that are flexible, convenient and give people easy access to their money.

• The environment has a significant effect upon the establishment of MF services;
• Trust or knowledge of borrowers' affairs and functioning markets is as important for informal MF as is security;
• Informal MF develops faster than semi-formal MF and can exist in areas of intense insecurity;
• Relief grants can have a significantly negative effect on MF for years after the handouts end;
• Informal MF in particular is used post conflict and constitutes a coping mechanism;
• Demand for MF is directly related to coping mechanisms;
• Future interventions should create innovative lending and saving mechanisms and must achieve a balance between the costs of provision and attractiveness of the product to clients.