In the aftermath of the 2004 tsunami, the microfinance sector in Sri Lanka experienced an influx of donor funds - in the form of grants, soft loans and subsidies. This encouraged many microfinance institutions (MFIs) to expand their outreach to areas/households affected by the tsunami. Moreover, a number of NGOs that have traditionally been involved in other welfare and development activities entered into microfinance. In this context, the study aimed at analyzing different microfinance programmes that were established by donors as an immediate response to the Tsunami and their impact on: microfinance programmes/MFIs, clients, and spillover effects on the microfinance sector in general. Furthermore, it brought out some important recommendations to help donors to improve their policies and practices for development of the microfinance sector in Sri Lanka.

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