Does Microfinance Work as a Recovery Tool After Disasters? Evidence from the 2004 Tsunami
Summary We evaluate the effectiveness of microfinance as a recovery tool after tsunami by testing the impact of an equity injection from foreign donors which recapitalizes a Sri Lankan MFI and allows it to refinance borrowers seriously damaged by the calamity. We find that loans obtained from the MFI after the catastrophic event have a positive and significant effect on the change in real income and in weekly worked hours, and that the impact on performance variables is significantly stronger for damaged than non-damaged borrowers. Results hold after controlling for selection effects and for heterogeneity in both the timing of the intervention and the characteristics of treatment and control samples.
Year of publication: |
2011
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Authors: | Becchetti, Leonardo ; Castriota, Stefano |
Published in: |
World Development. - Elsevier, ISSN 0305-750X. - Vol. 39.2011, 6, p. 898-912
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Publisher: |
Elsevier |
Keywords: | Asia Sri Lanka tsunami natural catastrophe crisis recovery microfinance |
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