Urban Disasters and Microfinancing

There is no question that disasters have a disproportionate impact on the poor. They suffer most, and they are more affected. In particular, the urban poor living in slums-now estimated at approximately 1 billion people-are at particularly high risk from the impacts of climate and natural hazards. The urban poor are on the front lines in the context of climate change and increasing risk of disaster depending on where they live. In order to improve the living conditions of urban poor donors, governments and nongovernmental organizations (NGOs) have introduced different approaches like slum up gradation projects and health and sanitation programs. But financial support or microfinancing to rebuild livelihoods, strengthen community bonds, and protect the poorest urban residents from income shortfalls after a natural disaster are not yet widely practiced, since slum dwellers are not considered to be creditworthy. Nonetheless, it has been proven that microfinancing can support economic and social rejuvenation after a natural disaster. Focusing on the practices of a number of cities in Bangladesh, India, and Indonesia, this chapter gives an overview of the availability, accessibility, and role of microfinancing for disaster risk reduction (DRR) and recovery of the urban poor.