Study on the role of microfinance sector in disaster risk reduction in India

This study discusses the potential role that Microfinance Institutions (MFIs) can play in disaster risk reduction activities and in mapping the disaster-related vulnerabilities of clients in order to assess opportunities for more effective disaster preparedness. 

MFIs have the potential to play a significant role in risk reduction. However, there are currently no organizational policies or protocols in place for MFIs to support disaster management and planning practices. MFIs do, however, capture client risk exposure at the loan application stage and many use technology platforms to collect real-time data on cash collection and loan disbursements. There is an opportunity for the information collected to be used to identify and map vulnerability. 

The research also found that microfinance institutions are as vulnerable to the impact of disaster as are their clients. This underscores the importance of risk mitigation and the need to shift from post-disaster support to pre-disaster preparedness. Based on the observations, it is recommended that stakeholders within the sector be encouraged to get involved in the development of a disaster mitigation and management strategy for the microfinance sector.