United States Institute of Peace

International Network for Economics and Conflict

Microfinance in Post-Disaster and Post-Conflict Situations: Turning Victims in Shareholders

Written by Marek Hudon and Hans Dieter Seibel

In recent years, large numbers of developing and transitional countries have experienced situations of crisis, following political, economic or natural disasters, or total crisis, triggered by war or totalitarian oppression. The goal of this article is to study the role of member-owned institutions (MOIs) in the provision of the reparations for victims of human rights abuses or reconstruction in post-conflict and post-disaster situations. We argue that grants usually awarded for reconstruction in post-conflict areas or for reparations payments in post-disaster areas could be best turned into equity and deposits to foster MOIs. MOIs are found to be an appropriate institutional framework, to make the benefits of oneoff payments more sustainable and also reinforce the financial sector.