Factors Determining the Financial Product Types and Demand in a Post Disaster Situation Identified by a Pairwise Ranking Approach: A Case Study of a Fishing Community in Hambantota District of Sri Lanka
The study sought to determine factors to be considered when packaging or designing financial products to clients, particularly to those who have just emerged from disaster situations. It was undertaken in Mawella in the Hambantota District of the Southern Region of Sri Lanka, Mawella being one of the coastal villages and towns which were severely affected by the December 2004 tsunami. By means of purposive sampling technique, three categories of people made up of fishermen, businessmen and boat owners were selected. The rationale behind this selection was that these three categories were observed to form the nucleus of the economic activities in the study village. Within these three categories of people, a snowball sampling technique was employed to select 60 participants for the study. Using the pairwise ranking technique, eight items underlying financial products were ranked. These eight items are the proximity of the service provider to clients, transaction costs, flexibility and speed with which services are provided, simplicity of transactions, customer-friendly approach to clients, wide range of products or services, safety of savings, collateral (guarantee) substitution, of which collateral substitution emerged as the most important determinant. Though collateral substitution was ranked as the most important item by the study participants, it is equally important that Microfinance practitioners for the sake of both financial and operational sustainability be cautious and prudent in granting loans without physical or tangible collateral. This is because a loan secured with a collateral tends to be a better investment option for the lender (microfinance institution) as borrowers may not want to lose their pledged property.
KEYWORDS: Fishing community, Microfinance, Pairwise ranking, Sri Lanka, Tsunami
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