MicroCapital: Please tell us about the theme of this year’s EUR 100,000 (USD 110,000) European Microfinance Award: serving people in post-disaster, post-conflict and fragile states.
Davide Forcella: This is a very timely issue because of the increasing frequency of microfinance institutions (MFIs) being forced to operate under very difficult conditions, due to both natural disasters and human conflict. The aim of the prize is to reward MFIs that react to these situations in such a way that increases impact in terms of restoring the livelihoods of clients and their families.
MC: What types of services might qualify for consideration?
Yekbun Gurgoz: The first challenge for an MFI under a disaster or conflict situation is simply to continue operations. Infrastructure might be totally destroyed; staff might be injured or displaced. The judges will focus on resilience – helping to rebuild communities and markets to support clients in restoring their businesses.
DF: It’s also a question of how to combat the kind of changes in society that conflict or disaster provokes. For example, social links may be severed because people are displaced. Borders could be closed, or a particular kind of trading may become otherwise impossible. In that peculiar and fragile situation, how can an MFI keep operating and somehow rebuild the links that allow people to survive and regenerate economic activity? Can the institution build up a favorable environment for this? How does it help people cope with new market conditions? How does the MFI change its financing strategy and operations in such a way that enables people to rebuild their businesses, their houses?
MC: Are you looking to recognize services that were in place before a disaster or conflict, or only those that were started afterward?
DF: Although the Award process will recognize that there can be a “preexisting preparedness” within the institution, meaning that it already works with vulnerable populations and there are practices in place to reduce vulnerability (for example, services that improve the environment can increase resilience), the judges will mainly consider how the MFI reacts to the event or shock. For example, how quickly did it react to provide newly tailored services?
MC: What would you say to someone from an organization who has heard about the Award but is unsure if her or his MFI should apply?
YG: We understand that she or he might be under time pressure, and so it may be challenging to complete the application. However, participation in the Award provides excellent visibility. For example, the 10 best applications will be featured in a publication of the European Microfinance Platform (e-MFP), and the three finalists will be invited to the European Microfinance Award ceremony that will be held during European Microfinance Week in Luxembourg in November. This is a great opportunity to boost the visibility of an institution.
Davide Forcella and Yekbun Gurgoz are serving as consultants to e-MFP to support the 2015 European Microfinance Award.
This interview is part of a sponsored series on European Microfinance Week, which is held each November by e-MFP, a 120-member network located in Luxembourg.
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