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Micro-credit in Flood Management: a Case Study of Bangladesh

Gulsan Ara PARVIN
Assistant Professor
Urban and Regional Planning Department Bangladesh University of Engineering and Technology (BUET), Dhaka-1000

Shah Mohammad Ashraful AMIN (Presenting Author)
Student
MURP Program,Urban and Regional Planning Department Bangladesh University of Engineering and Technology (BUET), Dhaka-1000

Abstract/ Executive Summary:

Being pioneer in the innovation of micro-credit program for the poor Bangladesh has made its distinctive niche in the world. In Bangladesh thousands of micro-credit programs are trying to alleviate poverty. But it is matter of regrets that the attempts often go in vain due to various natural disasters. The activities of Microfinance Institutions (MFIs) during the worst flood in 1998 resulted significant positive impacts on the affected people. Thus the attempts of Micro Finance Institutes unveiled a new dimension of micro-credit programs. Despite proven the potentiality of micro-credit programs in reducing vulnerability of flood affected people, the use of micro-credit for disaster management is still experimental. Therefore, the need for comprehensive researches and investigation to incorporate disaster management as an integral part of microcredit programs has become increasingly important. With the feeling of the urges of such need this research intends to identify the overall activities and performances of MFIs in flood management through empirical studies in Dhamai Village under Shaltia Union of Mymensingh district.

Keywords: Micro-credit Program, Flood Management, Natural Disaster, Poverty, Bangladesh

Location:

Start Date:

End Date:

Program Area: Socio-economic and Policy

Non-commodity: Credit

Objectives:

Aims of this study was to examine the relative advantages of the micro-credit program beneficiaries in coping against flood after being member of the credit programs.

Methodology:

RESEARCH DESIGN: This research tries to search for answers of the following queries under this particular dimension.
• What are the overall activities of Microfinance Institutions (MFIs) in the study area?
• What are the relative advantageous of micro-credit programs’ beneficiaries to cope or fight against disaster after being member of the credit programs?
In order to seek the answers of the above mentioned queries this study has delimited within the Dhamai Village under Shaltia Union of Mymensingh district. Conducting any study in a disaster prone area demands long time, much assistance, financial and other support facilities. Due to the absence of such condition, it has focused on only one village to depict an initial picture. Though the village is frequently affected by both flood and riverbank erosion, this study is restricted only over flood.

MICRO CREDIT INSTITUTIONS IN FLOOD MANAGEMENT: It is said earlier that micro-credit and micro-finance in general are not yet fully utilized as tools for disaster management or reducing disaster impacts. In most cases micro-credit programs provide small amount of loans for the self-employment of the poor. It often does not comprise many other crucial parts of their life. Among the various sectors of investments there is no sector mentioned or specified as disaster management. However, the MFIs cannot ignore the possibility of being impacted by natural disasters. Since almost all over the areas of Bangladesh are disaster vulnerable, many of the micro-credit programs often operate in communities and regions where natural disasters are an annual event. Natural disasters such as those caused by flood, storm, earthquake, etc. are a harsh fact of life for many poor households.
In the present study area- Dhamai Village under Shaltia union there are five different development organizations (Non-Government Organizations) who are primarily Micro Finance Institutions (MFIs). Most of these institutions imply the similar pattern of investment in different sectors found by DFID. With a view to examine the overall involvement of MFIs in flood management the activities of MFIs in the study area had been identified. MICRO-CREDIT IN FLOOD MANAGEMENT–PEOPLE’S PERSPECTIVE: It is said that one of the prime intentions of this study is to assess the performance of micro credit in disaster management. With a view to this 62 households (beneficiaries of different MFIs) have been interviewed through questionnaire survey. The interview highlighted the changes induced in the various aspects of living conditions of the beneficiaries of MIFs after being member of the institutions. Here a comparative picture between before and after being member of MFIs has been depicted to show the changes in floor height of the house, source of drinking water, sanitation condition and emergency food stock of beneficiaries. Though there are numerous aspects that are directly or indirectly related to flood management here only few indicators have been assessed to know the comparative position of micro finance program beneficiaries in flood disaster management. It is expected that this comparative picture would provide a clear indication of the role of micro-credit in flood management as well as to reduce flood vulnerability.

Source of Information: International Conference on Water & Flood Management (ICWFM-2007), 12 - 14 March 2007, BUET, Dhaka, Bangladesh

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Achievement/Findings:

Micro-credit has proven its value in many countries as a weapon against poverty and hunger. With access to micro-credit, people with low incomes can earn more and better protect themselves against unexpected setbacks and losses (Pitt, 2005). But micro credit and micro finance in general are not yet fully utilized as tools for reducing disaster impacts. Only some concrete experiences in India and Bangladesh have shown the potential of micro-credit and highlighted the need to further explore these opportunities (Nagarajan, 1998). The use of micro finance for disaster risk management is still somewhat experimental, but research should be undertaken to explore how micro finance can be used to militate against more widespread natural disasters.

Knowledge Management: Report/Proceedings