Innovative Approaches to Microfinance in Post-Conflict Situations : Bosnia Local Initiatives Project

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Over the past five years, the World Bank has developed useful post-conflict strategies that better meet the unique needs of war-torn countries. The Local Initiatives Project (LIP) in Bosnia presents a new standard of responsive social development in the Bank. While it demonstrates the need to use traditional project cycle practices, it also brings into focus many innovative approaches that may be considered in non-conflict settings as well, especially when pilot projects are used effectively. Post-conflict countries must deal with a great number of problems in short order. But such difficult predicaments also can yield important opportunities that should not be overlooked. The Bosnia Local Initiatives Project was able to cope with the problems and take advantage of the rapidly changing economic terrain. One advantage of the LIP was that the task manager (TM) was based in the field. The TM was able to track changes in attitudes and behavior of government officials and take advantage of opportunities for adaptive learning to redesign the project and create sustainable institutions. Because the economic and political arenas in a post-conflict country are fluid, having a task manager on the ground who was aware of both the local and national situations proved very useful. Extensive beneficiary and stakeholder involvement at design and implementation phases enabled the project to benefit from local leadership, experimentation, diversity, and mutual learning. Through the training components, alliances were also built among nongovernmental organization (NGO) partners, so that when it came time to downsize the original 17 NGOs to 5, a constructive process ensued that focused on the long-term success of the country's microcredit goals versus the NGOs' short-term ambitions. Transforming a pilot project into a national project required intensive stakeholder involvement at both the local and national levels. These types of coalitions for change need time to grow, but also need to see positive results as a way of mobilizing action for change. The use of a pilot project to initiate and test a national project enabled the team to work productively and quickly outside the bureaucracy of a skeptical government until the success of the pilot project was evident.
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Kuehnast, Kathleen. 2001. Innovative Approaches to Microfinance in Post-Conflict Situations : Bosnia Local Initiatives Project. Social Development Notes; No. 50. © World Bank, Washington, DC. License: CC BY 3.0 IGO.
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