Recovery lending in Africa: Helping the affected communities to recover faster from negative effects of a disaster

 This project supported 14,500 families in poor rural communities in Kenya, Malawi and Zambia to main tain their livelihoods in the face of severe droughts and floods caused by the 2015/6 El Niño. USD 3.3m in “recovery loans” were successfully made to these families and the impact of this intervention was exter nally evaluated. The evaluation and regular project reviews revealed that clients had ventured into more drought tolerant short season productive activities such as horticulture, small livestock, retail and service activities thus providing valuable income and bridging the gaps caused by the drought in their traditional crops and other activities. Post disaster, clients have often continued with these diversified portfolios and this has further increased their resilience and ability to withstand future disasters. This project built on both a previous recovery lending response with 5,000 families in the Philippines following Typhoon Haiyan and development work with the UK government (DFID) and Global Parametrics around the use of Financial Disaster Risk Management (FDRM) tools to fund such responses. We now have clear evidence that re covery lending works, in a wide variety of disaster scenarios and geographies with positive effects on both clients and microfinance institutions. We also have the data necesary to implement FDRM in VisionFund and to set a direction for our industry to follow.