The earthquake of April 16, 2016, with 7.8 on the Richter scale, affected primarily the Ecuadorian provinces of Esmeraldas, Manabi, Guayas, Los Rios, Santo Domingo de los Tsáchilas, and Santa Elena, killing 655 people and injuring 4,605, with 48 missing and more than 29,067 in shelters.
The National Secretariat of Planning and Development (SENPLADES) estimated damages at around US$ 3,000 million (3% of the GDP), especially in real estate, streets and roads, and production facilities. This mainly affecting the commercial, tourism, transportation, agriculture, construction, and financial sectors, and initially generated an increase in unemployment and underemployment, with a consequent reduction in incomes, purchasing power, debt capacity, and ability to pay.
In the specific case of the financial sector, it had a direct impact on the liquidity, profits and solvency of financial institutions as a result of i) a rise in delinquency, ii) increased withdrawal of savings by affiliates, iii) greater provisions, and iv) a potential loss of assets.
In response to the above, the Red de Instituciones Financieras de Desarrollo (RFD), together with the Dutch Social Investor: CORDAID Investment Management BV, developed a project to establish a framework of strategies designed to i) reactivating the operations of development finance institutions, ii) mitigating the risks arising from the earthquake of April 16, 2016, and iii) taking advantage of the opportunities presented by reconstruction and rehabilitation of the affected areas.
For the English version of the document click the button below. For the Spanish version click here.
Cover photo credit: EU Humanitarian Aid and Civil Protection Earthquake in Ecuador: the EU’s emergency response via photopin (license)