Brief 6- Security Issues for Microfinance Following Conflict

MFIs that serve marginalized, insecure communities face risks to their staff, clients, and assets because of the following reasons:

• Relatively large amounts of cash are carried to the communities during loan disbursements;
• Tempting sums are carried back to banks or offices after payments are collected;
• Since the transactions methodology is open and transparent, anyone in the community may know when and where these events take place.

Factors which increase the risk in conflict affected areas are that weapons are available, and demobilized soldiers, trained to use arms, may feel the need to use them. The absence of commercial banks also increases risk. Some of the security guidelines in conflict affected areas that are mentioned in the paper, are:

• Encouraging staff to be continuously vigilant;
• Staff and clients wearing uniforms of organizational T-shirts;
• Wearing clothes and shoes which allow running, if necessary;
• Traveling during the day. 

The paper suggests steps for commercial banks:

• Travel in groups of twos or fours;
• Hire more male loan officers;
• Never allow personnel to travel alone. 

The author recommends the following steps where commercial banks do not exist:

• Avoid cash loan disbursements;
• Encourage clients to make payments to the group treasurer outside the group meetings;
• On payment days, randomly choose a member to carry cash to the bank.