Brief 4- Environmental Preconditions for Successful Post-Conflict Microfinance

This paper identifies three environmental conditions that appear to be so important that without them, microfinance should not be undertaken. 

1. The program area must have a certain degree of political stability;
2. The program area should show sufficient economic activity that can use creditservices; 
3. The client population must be relatively stable.

In addition to the “essential” conditions of political and population stability and economicactivity, there are three conditions that have been deemed preferred but not absolutelynecessary, at least in the short run:

• Functioning Commercial Banks;
• Social Capital, or Trust;
• Macroeconomic Stability.