Creating Financial Services In Conflict Affected Areas: A Critical Analysis

Abstract

This paper is based on a literature study carried out for a doctoral dissertation on microfinance in conflict-affected areas. This paper attempts to explain the viability of microfinance interventions in conflict areas based on the distinctive conditions that prevail in unresolved conflict zones. It is argued that provision of financial services at the early stage of recovery can contribute to wider developmental objectives of restoring income-generating livelihoods and improving self-reliance of conflict affected households. It also recognizes that, unlike in the normal circumstances, microfinance in conflict affected areas can be expected to yield relatively limited impact due to the conflict related constraints, faced by both the providers and clients, which are largely beyond their control. It concludes that in conflict-affected areas there is a need to critically analyse factors at multiple levels that could inform designing and implementing financial services.