Grameen Foundation USA Study Recommends Microfinance as a Powerful Tool to Accelerate Economic Recovery in Tsunami-Ravaged Nations

Groundbreaking Study Recommends Investment of 47 million in Microfinance Services to Help Tsunami Victims Build or Rebuild Family-Sustaining Businesses in Indonesia, Sri Lanka, India and Thailand

Washington, DC (PRWEB) May 26, 2005

A targeted investment in microfinance services could help more than 100,000 people in four tsunami-affected countries to build, rebuild or resume family-sustaining businesses such as fishing, farming and merchant shops, according to a new study released by Grameen Foundation USA (GFUSA).

The groundbreaking study, Recovery from Tsunami Disaster: Poverty Reduction and Sustainable Development through Microfinance, will be the focus of an unprecedented one-day conference sponsored by Grameen Foundation USA and Third Millennium Foundation. The conference will be held May 26 in at The International Center for Tolerance in Brooklyn, New York.

Grameen Foundation USA commissioned the three-month, on-site study after the tragic December 26, 2004, earthquake in the eastern Indian Ocean sent massive waves in all directions, killing or displacing thousands of people and destroying the livelihoods of thousands of families. GFUSA, in partnership with the Grameen-Abdul Latif Jameel Initiative, appointed the team of experts to survey the tsunami region. This team’s mission was to assess the condition of the poor, the condition of existing microfinance institutions in the region and identify opportunities and best practices for ensuring that microfinance reaches its full potential as a post-disaster recovery strategy. The report’s findings will help structure a new era of microfinance programming in the region.

“The tsunami devastated local economies and wiped out tiny businesses that had enabled many families to live above the poverty level before this natural disaster,” said Alex Counts, president of GFUSA. “Our report concludes that microcredit – small loans ranging from just $50 to $400 for entrepreneurial individuals – could have a dramatic impact in restoring hope and economic promise for thousands of families in Indonesia, Sri Lanka, India and Thailand.”

Grameen Foundation USA is a leader in microfinance as a proven anti-poverty solution that helps has helped poor families in emerging countries improve their socioeconomic conditions through entrepreneurship and self-help. Members of GFUSA’s tsunami assessment team were on-site in the areas affected by the tsunami from February through April 2005, and worked in concert with microfinance experts in Washington. To the foundation’s knowledge, this is the only systemic, regional survey of microfinance-related impact opportunities in tsunami-affected countries.

The study examines five specific nations – Indonesia, Sri Lanka, India, Malaysia and Thailand – and the potential impact of microfinance as a cost-effective economic solution in the tsunami-ravaged countries.

The loans proposed by Grameen Foundation USA would address “opportunities for impact” and specific needs. Those dire immediate needs include the following:

• Fishermen need loans to rebuild their boats and repair or replace equipment that was damaged or lost;
• Farmers need funds to reclaim flood-soaked lands and purchase livestock and equipment;
• Shopkeepers and traders need to rebuild depleted inventories and purchase food and other items for resale; and
• Craftspeople need money for supplies, new sewing machines and more.

More than 12 microfinance projects are ready to be funded and launched to tackle the severe devastation.

“Grameen Foundation USA is asking individual donors, corporations and other partners to join with us in making microcredit available to entrepreneurs who were affected by the tsunami,” said Mr. Counts. “We know that microfinance is a powerful, yet largely untapped, resource that would help people and communities recover.” While major disaster relief agencies are pouring in large amounts of aid, microfinance allows greater targeting of funds to the poorest people who have the greatest challenge for recovery. This strategy also supports continued social and economic development for families, beyond survival.

In addition to underwriting the study, the Grameen-Abdul Latif Jameel Initiative has committed another $1 million toward implementing the report’s final recommendations. British-based Northern Rock Foundation has also pledged $184,000. Through this report and the conference, GFUSA is encouraging other organizations to join its Post-Tsunami Recovery Initiative.

Throughout the day, the study’s authors will present their findings, followed by a panel discussion and workshops with noted microfinance experts. The conference occurs during the United Nations’ International Year of Microfinance (2005).

About Grameen Foundation USA

Grameen Foundation USA (GFUSA) is a global non-profit organization that combines microfinance, new technologies, and innovative thinking to empower the world's poorest people to escape poverty. Founded in 1997, GF-USA has established a global network of 50 partners in 20 countries and has impacted an estimated 5.5 million lives in Asia, Africa, the Americas, and the Middle East. For more information on Grameen Foundation USA, please visit our Web site at http://www.gfusa.org.

About Grameen-Abdul Latif Jameel Initiative

Grameen-Abdul Latif Jameel Initiative is a partnership between Grameen Foundation USA and the Abdul Latif Jameel Company, a leading private company in Saudi Arabia.

(Note to Media: The conference is open to the media, and Grameen Foundation USA is scheduling pre-conference interviews as well. To attend the conference or schedule interviews, please contact Michelle Tennant at 828-749-3200 or michelle@tennant.org)

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