Building Disaster Resiliency: A Guidebook

Oikocredit has created a practical guidebook with and for microfinance institutions (MFIs) based on lessons learned during the initial roll out. Marilou Juanito, Oikocredit’s regional capacity building and social performance coordinator in Southeast Asia, shares more in the interview below.

Why is disaster resilience important for microfinance institutions (MFIs)?

When natural disasters happen, MFIs incur many financial and non-financial losses. In the worst case this means loss of clients killed in the disaster, but also clients defaulting on loans and increased operational costs. Non-financial losses can include losing physical files and records, and damages to the office like power outages which can delay or stop operations.

MFIs often lack clear preparedness planning and only focus on relief and rehabilitation. Yet it is essential that they can return to business and serve their clients within the shortest time possible after a disaster occurs. This requires both disaster risk preparedness and business continuity planning.

How does Oikocredit support MFIs in building disaster resilience?

Oikocredit has a long-standing policy of supporting partners affected by natural disasters through extending solidarity funds in times of crisis. To meet the current and future challenges as a consequence of climate change, natural disaster management was incorporated into Oikocredit’s environmental policy in 2014.

We recognised our responsibility to help our partners offer both relief and sustainable long-term support to those affected by natural disasters, including getting our partner MFIs back to business as soon as possible.

That’s why we developed the Disaster Risk Reduction Management (DRRM) programme, focused on strengthening the capacity of our partners to build disaster resilience and operational sustainability into their wider risk management planning.

How was the DRRM programme developed?

The DRRM programme was piloted in the Philippines in 2014. Our local staff there was highly motivated, as we had been struck by many disasters like super typhoon Haiyan in 2013 which resulted in thousands of lives lost and mass destruction.

The Philippines experiences an average of 20 typhoons every year. Situated in the Pacific Ring of Fire, it is vulnerable to frequent earthquakes and volcanic eruptions. Due to its geographical location it is also highly susceptible to tsunamis, rising sea levels and storm surges. With reduced forest cover, landslides and flooding are also frequent¹.

In 2015 we rolled out the programme to other Southeast Asian countries, including Cambodia, Vietnam and Indonesia. Recently the programme has also been expanded to Ecuador.

What does the DRRM training and capacity building entail?

Managing disaster risk reduction is dependent on both location and hazard. The training starts by having MFIs assess their own context. What are the hazards they may face? What risks are associated and could possible impacts be? These key questions form the basis of DRRM planning to anticipate a natural disaster.

The training also includes essential business continuity planning to restart operations as soon as possible following a disaster. What needs to be done first to recover as quickly as possible? MFIs learn to set a recovery time objective, for example to be back in business within one day after the disaster.

Another key element is setting up contingency plans by mapping out resources, emergency centre and hospital locations, emergency contact lists, preparing logistics like food, lights and drinking water supplies for the employees in case they cannot leave.

The training also covers how to establish a call-tree to reach from headquarters down to financial centres and clients in affected areas; financial plans to allocate funding in the MFIs annual budget in case of disaster; and how to review lessons learned after a natural disaster has happened.

Could you provide examples of the DRRM programme results in practice?

For our partner OCCCI a disaster happened just after we completed our training with them. They said the call-tree was a very effective way to warn all their centres and clients about the disaster ahead of time.

Similarly, I recently visited one of our partner ASKI’s financial centres and asked one of their clients how she was affected by Typhoon Ompong. She said that they were prepared and warned with information from ASKI three days before about the typhoon coming. Because the rice crop was already ripe, they were able to harvest and able to save on losses.

In 2016 our partner RPMI’s office was heavily affected by Typhoon Haima and had to move operations to another location. While in previous instances it used to take them a week, they were able to go back to work the day after the storm thanks to having a strong business continuity plan in place.

Last month (October 2018) with Typhoon Yutu, our MFI partner RPMI could launch their relief operations faster and more effectively thanks to the DRRM planning in place. The day after the storm, relief goods were secured, packed and sent to the affected areas.

Finally, offering micro-insurance has been a vital DRRM support instrument for MFI clients. For example, our partner Milamdec provided micro-insurance to all their clients, and when several houses flooded they were able to receive compensation. Similarly our other partners, CARD, ASHI and ASKI all provide crop insurance for their clients.

What is the purpose of the DRRM Guidebook?

Linked documents

	Title	Filesize	MIME-type
	Download the 12 Steps to Resiliency Guidebook - PDF	129.6 MB	application/pdf