managing risk.pdf

98Chapter 7 - Disaster Management: Preparing for the Worstdevastating effects on all aspects of a society and the economy. For this reason, disaster preparedness can savelives and property and can speed the process of recovery.Governments, donors, and MFIs have important roles to play to speed relief and begin the recovery process.Governments coordinate efforts from disaster preparedness to the moment the damage reports arrive, as wellas through midterm recovery. Donors often respond by establishing contingency funds that are dedicated tofinancing recovery efforts. MFIs have a unique combination of skills, networks, and client bases that makethem valuable partners, from the initial onset to the sustained recovery after a disaster.By coordinating with other MFIs, government agencies, municipal authorities, and donors, the MFI is in astrong position to be an important partner in local, regional, and even national responses. With plans in placefor the most likely human, physical, and financial shocks in the aftermath of a hurricane, earthquake, or flood,the MFI can serve the immediate needs of its clients. Some effective responses to disasters have included newtypes of loan products, adjustments to conditions for outstanding loans, and changes in delivery methodologies(such as allowing groups to set lending priorities among members). Whatever the response, MFIs should learnfrom the painful lessons of the past—because the benefits of preparing for the next disaster far outweigh thecosts.