Understanding Household Resilience of the Poor in Burkina Faso

The key theory of change for the microfinance industry has historically been one in which access to and use of formal financial services reduces household poverty; however, research conducted around the world has yet to successfully validate this theory. Newer theories of change suggest the primary benefit of financial services for poor households is that they help build household resilience by helping households anticipate, adapt to and/or recover from the effects of shocks in a manner that protects their livelihoods, reduces chronic vulnerability and facilitates growth. This interim research report aims to fill some of the gaps in knowledge about how different financial services, particularly those designed to anticipate and respond to common household shocks, contribute to household resilience in Burkina Faso and is guided by two primary research questions: 1) What strategies do poor households employ to manage economic, environmental and health shocks that disrupt their financial lives? 2) What roles do formal, nonformal and informal financial products play in improving household resiliency and building assets?