Tonga: From Microfinance to Relief

Updated: Jul 15

Thank you for helping SPBD Tonga to transform from a microfinance institution into a relief organization. With your generosity, team Tonga distributed 3,000 disaster relief kits. You helped not only to provide kits but also hope to thousands of grateful families.

The January 15th eruption of the Hunga-Tonga-Hunga-Ha volcano and the ensuing tsunami, flooding and ashfall devastated the country of Tonga. Testimony and images of the disaster show significant damage to homes, crops, livelihoods and infrastructure. In the immediate aftermath, SPBD set in motion the initial actions* of our disaster relief.






The full disaster relief and recovery-rehabilitation program includes 5 key components:

1. Loan Moratorium*

2. Damage Assessments*

3. Relief Kit Effort

4. Restructured Loan Program

5. New Rehabilitation Loans


1. LOAN MORATORIUM Immediately after the eruption, SPBD Tonga granted all members a 7-week moratorium on repayments of their existing loans. The loan moratorium significantly decreases the burden on members as it allows them to focus on their priorities – ensuring their families’ needs and safety; assessing damage to homes, belongings, crops and businesses; and cleaning up debris and volcanic ash in their communities – instead of repaying any of their SPBD loans. This 7-week period also allows most members to restart their microbusinesses, as they begin to recover from the disaster.


2. DAMAGE ASSESSMENTS SPBD also transformed from a microfinance institution into a relief organization to attend to members’ and their communities’ needs. The 40-person Tonga team surveyed members on all four main island groups –Tongatapu, Ha’apai, ‘Eua and Vava’u – to assess: • the number of members impacted by the eruption, tsunami, flooding and ashfall, • the extent of the devastation on members’ lives – in particular housing and livelihoods, • the extent of the devastation to the broader communities, and • the immediate needs for various goods / items of members and their families.


3. RELIEF KIT EFFORT The goods in the kit include bottled water, rice, flour, breakfast crackers, tinned fish, tea, sugar, laundry powder and dish soap. The cash component will provide members with the flexibility to purchase items specific to their situations – e.g., medicine, perishable food, baby food, diapers, etc. With generous donor support, SPBD and MicroDreams aim to provide relief kits to 4,421 families across Tonga.


4. RESTRUCTURED LOAN PROGRAM Above and beyond providing relief kits, SPBD Tonga is looking to help members rebuild and rehabilitate businesses, homes, and lives. To ease the burden on clients further, SPBD will offer all members the opportunity to restructure their existing loans. These restructured loans will be for 50 weeks and will be offered under favorable terms, including a lower interest rate – with the resulting benefit that members weekly loan repayment amount will be lower and manageable in a post-disaster situation. SPBD estimates that approximately 70% of members with active loans (~3,000 women) may restructure their loans.


5. NEW REHABILITATION LOANS SPBD will also offer Rehabilitation Loans to clients. Members eligible for this program will be able to access new, lower-interest financing in the form of a Rehabilitation Loan to repair their damaged homes and livelihoods. SPBD estimates that 60% of members with active loans, or approximately 2,630 women will likely access the rehabilitation financing.

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