Microfinance Role in Post Conflict and Crisis Situations

This paper discusses the role that microfinance can play in post-conflict and crisis situations.

It begins by explaining the following aspects of microfinance:

• Role as a poverty alleviation tool;
• Advantages over formal financial institutions (FFIs);
• Target population;
• Goals, principles, products and services;
• Microcredit as a core product.

The paper then discusses:

• Main characteristics of post-crisis areas;
• Ability of microfinance to bring about effective solutions because of its flexibility and adaptation to peoples needs;
• Microcredits potential as a development tool;
• The role of group meeting and social mobilization in providing:
  • Technical support;
  • Support in moral and social reconstruction;
  • Informal training and therapy.

The paper identifies the following concrete benefits of microfinance in post-conflict situations:

• Change of social pattern;
• Empowerment;
• Sectoral development.

The paper recommends multilateral partnerships between the donor community and operating MFIs to make an effective contribution in the post-conflict scenario. It concludes by presenting two case studies of MFIs that have provided effective solutions to conflict-affected populations through microfinance.