I have repeatedly wondered this question with respect to natural disaster since I have begun working in Santiago with Esperanza International and Kiva.  What happens to microfinance bank members when natural disaster strikes?

In the case of the Dominican Republic, natural disaster comes often and in the form of tropical storm and hurricane activity.  Since arriving two months ago I have come across the stories of two individuals, each effected by natural disaster.

Gladys, mother of three, lost everything to tropical storm Olga in December of 2007.  Around midnight on a December evening the Tavera Dam collapsed on the Yaque River and allowed 1.6 million gallons of water a second to enter the surrounding communities.  According to Gladys, hundreds were killed.  She declared everyone was sleeping; it was  unexpected.

Due to the failures of the government infrastructure, the Dominican government has built a housing development for those affected by the collapse of the dam.  Gladys has now been living for nine months in this development and is beginning the process of re-establishing her nail salon with her first microfinance loan from Esperanza International.  In additional to free housing, Gladys is also receiving 300 pesos a month for each child living at home, four gallons of gas a month for cooking purposes, and insurance.  Despite the government’s efforts to aid this population it is clear it is a long road ahead.

Olga, mother of four children, has also suffered the effects of flooding and tropical storm activity.  In February 2009 tropical storm activity passed through Santiago and relentless rains persisted for seven days.  Flooding was inevitable.   Olga, as well as her neighbor and fellow member of her microfinance bank, lost their homes due to the flooding.  In the case of Olga and her microfinance bank, unlike the story of Gladys there is no government assistance.  Olga, on her third microfinance loan with Esperanza, is beginning the process of rebuilding.

Countless stories can be told of the effects of natural disaster amongst other cities in the Dominican Republic and throughout the world.  A trend appears to be evident however; the poorest of communities, due to financial restrictions, live in those areas most prone to the sufferings of natural disasters.  According to the UNDP 2004 Reducing Disaster Risk: A Challenge to Development report, “85 percent of the people exposed to earthquakes, tropical cyclones, floods and droughts live in countries having either medium or low human development”.  A cycle of disaster, recovery and disaster can often be seen that leads to the question of how microfinance organizations can best work in these communities.  It is a question I hope to learn more about as I continue to interact with these two women.