nep-mfd New Economics Papers
on Microfinance
Issue of 2007‒10‒20
one paper chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

  1. Fall and recovery. Disruption and catching up effects aftertsunami on a sample of MFI borrowers. By BECCHETTI LEONARDO; CASTRIOTA STEFANO

    Abstract: We evaluate the effects of the tsunami shock on several monetary and non-monetary wellbeing indicators of 305 randomly selected MFI borrowers in Southern Sri Lanka and find four main results. First, psychological wellbeing indicators vary more than material ones when scaled on their own pre-tsunami standard deviations. Second, people who had no economic damages did not report any significant psychological loss (contrary to the “solidarity effect” found by some authors after the hurricane Katrina in 2005). Third, although the process is not complete yet, most of the material and psychological wellbeing indicators of the damaged people are recovering to their own pre-tsunami levels and converging to those of non-damaged ones after MFI refinancing. Fourth, we find a positive impact of the amount of MFI refinancing scaled by the post-tsunami income on real income growth. On the contrary, governmental subsidies, donations and grants do not have any positive impact on the recovery.
    Date: 2007–10

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