Research study of post-conflict microfinance in Mozambique

Publication Date: 2001
Published by: Post Conflict Microfinance Project

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What is the relevance of knowledge on the effect of conflict on coping mechanisms for MFIs?

The paper states that for a client-based approach to microfinance, MFIs need to have in-depth understanding of traditional coping mechanisms, the effect of conflict on these coping mechanisms and their evolution over time. Furthermore, potential microfinance providers should carry out a detailed analysis of demand in order to design appropriate interventions and products. Using primary data obtained through a qualitative research approach via focus groups discussions and semi-structured interviews conducted in Mozambique between June and August 2001with key actors in the microfinance sector (staff of Microfinance Institutions (MFIs), NGOs, clients, non-clients, ex-clients and local moneylenders), and secondary data obtained through a review of relevant literature, the paper addresses three main areas in post-conflict microfinance (PCM): the environment, coping mechanisms for the poor and microfinance products in demand. It also looks the main challenges confronting NGOs and MFIs. The major findings amongst others are:

• a lack of understanding of the interrelationships between the political, social and economic situation at national and local levels has a negative effect on microfinance
• coping mechanisms vary within the country, province and district and evolve over time, however, the household asset base determines how households cope during and after conflict
• the types and characteristics of the products demanded change with the evolving environment