Post-Conflict Microfinance

I thought this was an interesting Financial Times article documenting the use of microfinance in Iraq. The Al-Baydaa Centre in Balad was cited as a successful initiative in rebuilding economic activity. I thought the model they used was interesting, joint-liability in the form of one person rather than the JLG group.

“When we lend the money we make sure that the borrower is going to invest it in something that is viable enough to generate the monthly repayments,” Mr Saleh says, adding that all loans are guaranteed by an acquaintance of the borrower."

This article got me thinking about the appropriateness of microfinance in post-conflict or post-disaster situations. When should one draw the line between subsidized funding and funding at market rates? Especially in a place like Iraq where there are a myriad of actors doling out cash or in-kind goods at subsidized rates, when is the right time to begin disbursing credit? I also wonder in a place like Iraq, with such sectarian divisions....about the complications in implementation.

Thoughts?