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The Emerging Role of Microfinance Programs in Mitigating the Impact of Natural Disasters: Summary Findings of World Visions Ethiopian Affiliate
The impact of microfinance programs in disaster mitigation and relief
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This progress note reviews the key findings of a study of WISDOM, the World vision Microfinance affiliate in Ethiopia. The study sought to assess the impact of WISDOM on socio-economic and nutritional well being of its members within the context of the 2002-2003 Ethiopian drought and food insecurity crisis.
The study followed the following methodology:
- A three-group, cross sectional survey design was used to study the relationship of participation in microfinance program, household well being and coping capacity of households in drought affected areas;
- Established clients were compared to two controls incoming clients and community controls.
The key findings of the study are:
- Greater diversification of income sources among clients;
- Increased land and home ownership among clients with likelihood of ownership increasing with length of participation in the microfinance program;
- Improved nutritional status in female clients, and in the children of female clients;
- Improved household diet in female clients;
- Reduced receipt of food aid among female clients.
The study concludes that:
- Microfinance programs that target female clients are more likely to have the greatest impact on household well being;
- Microfinance programs present an opportunity to increase population coping capacity and resistance, ultimately minimizing the negative impacts of natural disasters.
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