Marion Allet presented a New Paper, describing the challenges that an MFI can face when implementing an environemntal rist program: Mitigating environmental risks in small-scale
activities: what role for microfinance?
Small-scale activities in developing countries face
environmental risks that represent direct threats to populations’ health and
livelihoods. Recently, some donors and experts have claimed that microfinance
institutions (MFIs) could play a role in fostering pro-environmental behaviours
among their client microentrepreneurs. This paper seeks to identify the
challenges that an MFI can face when implementing an environmental risk
management program. We based our analysis on a case study of a pilot program in
El Salvador, where we conducted 95 semi-structured interviews with microfinance
clients, loan officers and managers. Our study first revealed that, despite a
real interest from its staff, the MFI had some difficulties in building
internal skills and conciliating its environmental and performance objectives,
which compromised the effective implementation of the program. Furthermore, we
identified that the pilot program, as it was designed, did not sufficiently
take into account the psychological and economic barriers to behaviour change.
Finally, we found that the effort of the microfinance institution was in some
cases countered by external factors out of its reach, such as inadequate
national regulations.
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