Disaster Management for Microfinance Institutions in Mozambique: Reflecting on Lessons Learnt for Future Directions

This paper examines a range of strategies and products used by MFIs around the world for disaster management. It assesses the implications of these tools for use by MFIs in Mozambique. 

The paper reviewed MFI responses to disasters in a number of countries, and found that many MFIs used a range of products. The article explores the implications of these for Mozambique, including:

• Grants (in-kind and cash);
• Training and education of clients (ex-ante and ex-post);
• Loans (ex-ante and ex-post);
• Savings (ex-ante and ex-post);
• Insurance (ex-ante and ex-post);
• Microleasing;
• Disaster loan funds.

The paper concludes that MFI experiences with disaster management have, to date, been encouraging, in particular that it is possible to minimize losses through:

• Diligent management of portfolio and cash flow;
• Building robust institutional infrastructure with skilled human resources;
• Inculcating client discipline;
• Effective coordination of stakeholders during normal times and choice of relevant products and strategies to mitigate and cope with disasters.