The Bank of Ghana, the central bank of the country, recently introduced a series of measures to cushion the effects of the COVID-19 pandemic on microfinance institutions (MFIs). Many MFIs are struggling with liquidity for various reasons including that many have granted their borrowers repayment moratoria of up to 6 months. Citing a recent report from the Bank of Ghana, Samuel Darko, a local researcher, warns that a “liquidity stress-test conducted for the sub-sector shows minimal survival rate for
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SPECIAL REPORT: Stakeholders Fearful, But with Tentative Hope Too in e-MFP’s Just-published “COVID-19 Financial Inclusion Compass”
The
European Microfinance Platform (e-MFP) has published the COVID-19 Financial Inclusion Compass, a special edition of the Compass series specifically focused on the current challenges, medium-term priorities, concerns, opportunities and forecasts for a sector facing probably the greatest crisis in its modern history.
The world – the financial inclusion sector included – is in the midst of twin crises: (1) a novel and highly contagious virus with no vaccine or cure that shows no signs of abating; and (2) a genuinely global recession as a result of the unavoidable containment measures put in place. The situation is uncertain and dynamic. Six months from now, the landscape will
MICROCAPITAL BRIEF: Fonds National de la Finance Inclusive (FNFI) Cuts Interest Rates, Boosts Commissions for 9 MFIs in Togo Due to COVID-19 Pandemic
To support nine of its partner microfinance institutions (MFIs) in adapting to the COVID-19 pandemic, the Togolese government’s Fonds National de la Finance Inclusive (FNFI) is taking the following measures: (1) cutting interest rates on its loans to the MFIs by 1 percentage point; and (2) boosting the management fee that the MFIs receive for
MICROCAPITAL BRIEF: FinDev Canada, FMO Loan $72m to Latin American Agribusiness Development (LAAD) for SME Finance
Development finance institutions (DFIs) FinDev Canada and the Netherlands Development Finance Company, which also is known by its Dutch acronym FMO, recently provided a syndicated loan of USD 72 million to the US-based, for-profit Latin American Agribusiness Development Corporation (LAAD). LAAD will use the funds to finance term loans and revolving lines of credit to small and medium-sized enterprises (SMEs) involved in agriculture in Latin America and the Caribbean, with the goal of spurring market development and job growth in rural communities. LAAD requires that each of its loans is used according to an
MICROFINANCE PAPER WRAP-UP: “The Impact of the COVID-19 Pandemic on Education Financing,” by Samer Al-Samarrai et al, published by the World Bank Group
This paper explores the economic implications of COVID-19 and arguments for mobilizing resources from government and development partners to alleviate educational losses in terms of educational services, student enrollment rates and student achievement. The authors also consider recent policy interventions and proposals in contrast to similar efforts made during past crises. The
MICROCAPITAL BRIEF: Via Atlas, CGAP Begins Releasing Results from Biweekly “Pulse” Survey of Microfinance Institutions (MFIs) on COVID-19 Impact
In an effort to understand the needs of microfinance institutions (MFIs) and their clients during the COVID-19 pandemic, the US-based NGO CGAP (Consultative Group to Assist the Poor) recently launched a biweekly survey called the “Global Pulse Survey of Microfinance Institutions.” CGAP is releasing the results on the Atlas data platform, which is a service of Italy-based MFR (MicroFinanza Rating), in the form of 13 charts. These charts can be manipulated to group the data by
MICROFINANCE PAPER WRAP-UP: “2020 Annual Impact Investor Survey,” by Dean Hand et al, published by the Global Impact Investing Network (GIIN)
The 10th edition of this survey includes responses from 294 impact investors, those that seek to “generate positive, measurable social and environmental impact alongside a financial return.” From the data the authors have collected, they reach the following conclusions:
MICROFINANCE PAPER WRAP-UP: “Impact of COVID-19 to MFIs in Indonesia: A Rapid Assessment,” published by Rise Research and Training
The authors of this paper conducted a “rapid assessment” of microfinance institutions (MFIs) that operate in ten provinces of Indonesia to: (1) identify key challenges that MFIs face due to the COVID-19 pandemic; and (2) define support mechanisms to sustain their business operations. The data is based on a survey of
SPECIAL REPORT: COVID-19 Edition of Financial Inclusion Compass Survey Launches – Looking at Challenges and Priorities of a Sector Under Threat – An Invitation to Participate
From the European Microfinance Platform (e-MFP): e-MFP has launched the third e-MFP survey of financial inclusion trends, but as a special edition focused solely on the challenges and priorities facing the sector as a result of the COVID-19 public health and economic crisis. Several months into this global crisis, with its critical threat to vulnerable populations, financial inclusion providers and the entire ecosystem that supports them, the scale of the challenges ahead is becoming increasingly clear, and stakeholders can think not just about the immediate effects, but their priorities in the medium term as the sector recovers from this and puts in place measures to
MICROCAPITAL BRIEF: 26 Inclusive Finance Players Pledge to Support Microfinance Institutions (MFIs), Clients Throughout Pandemic
At the initiative of the Luxembourg-based Grameen Crédit Agricole (GCA) Foundation, microfinance lenders and other operators in the inclusive finance sector have agreed to a set of “Key Principles to Protect Microfinance Institutions and Their Clients in the COVID-19 Crisis.” The commitment involves measures including: operating in a customer-centric manner, protecting staff members, sharing
SPECIAL REPORT: COVID-19: Communicate – Learn – Act, by Christian Ruehmer of Q-Lana
COVID-19 
is having significant effects on our personal and professional lives. We have heard a lot of suggestions of how financial institutions can handle this critical situation. Summarizing the information of the past days and weeks, we see three key steps, “communication,” “learning” and “acting,” which can be applied among four target groups: “staff,” “clients,” “investors” and “regulators.” We keep our findings short and focused:
Staff:
Communicate: Staff members work from home or provides essential services under stress. Understand their worries. Show empathy for their problems. Communicate regularly through multiple channels. Encourage collaboration.
Learn: Is communication technology working? What are the personal challenges? How can staff stay motivated? Can you maintain
MICROCAPITAL BRIEF: Reserve Bank of India Moves to Increase Liquidity for MSMEs, Farmers Impacted by COVID-19 via MFIs, NBFCs
In response to the COVID-19 pandemic, the Reserve Bank of India (RBI), India’s central banking authority, recently moved to increase the supply of credit to farmers and micro-, small and medium-sized enterprises (MSMEs) via microfinance institutions (MFIs) and non-banking finance companies (NBFCs). These steps include
MICROCAPITAL BRIEF: Amid Pandemic, Fintechs Pause Some Projects, But Innovate to Care for Customers, Staff
MIX, an NGO based in the US city of Washington, recently surveyed 25 financial technology (fintech) providers and investors regarding their responses to the COVID-19 pandemic. Over the past two months, investment in fintech providers has fallen, as has their revenue, due to lower remittance and lending volumes. The fees that fintechs charge are also down, sometimes at fintechs’ choosing, but sometimes by government decree. Clients have more incentive to use mobile money due to travel restrictions, branch and agent closures, and the potential transmission of germs via cash. However, they have less money to transact. One study found that four in five business owners in Kenya did not
MICROFINANCE PAPER WRAP-UP: “Guidance Note, Business Continuity: Attention Points for Business Continuity for MFIs in View of the COVID-19 Outbreak,” published by ADA
By Hans Hekkenberg et al, published by ADA (Appui au Développement Autonome), March 2020, 20 pages, available at http://www.ada-microfinance.org/download/6423/guidance-note-bc-march2020.pdf
This document lists areas of concern for microfinance institutions (MFIs) regarding their crisis management related to the COVID-19 pandemic. Its objective is to
MICROCAPITAL BRIEF: Board for Small Scale Industries, Mastercard Foundation Announce $15m Emergency Fund for MSMEs in Ghana Affected by COVID-19
The Canada-based Mastercard Foundation and Ghana’s National Board for Small Scale Industries (NBSSI), a unit of that country’s Ministry of Trade and Industry, recently agreed to respond to the COVID-19 pandemic with a “Recovery and Resilience Program for MSMEs.” The program will provide micro-, small and medium-sized enterprises (MSMEs) with
MICROCAPITAL BRIEF: To Reduce Spread of COVID-19 in Kenya, Safaricom Suspends Fees for Smaller M-Pesa Mobile Money Transactions, Boosts Maximum Balance, Opens Toll-free Call Center to Answer Coronavirus Questions
At the urging of Kenyan President Uhuru Kenyatta, the mobile network operator Safaricom has loosened the terms for Kenyans using its M-Pesa mobile money product for at least the next 90 days. This is intended “to reduce the risk of spreading the [COVID-19] virus through the physical handling of cash.” Customers will pay nothing to send amounts of up to KES 1,000 (USD 9.40). In addition, the Central Bank of Kenya is allowing for a daily M-Pesa transaction limit of
MICROCAPITAL BRIEF: Development Finance Institutions Collaborate to Add Gender Metrics to Global Impact Investing Network (GIIN) IRIS+ System
A group of development finance institutions (DFIs) recently collaborated with the US-based nonprofit Global Impact Investing Network (GIIN) to improve the way they track the results of their investments in women in developing countries. The outcome is an expansion of GIIN’s Impact Reporting and Investment Standards Plus (IRIS+), which provides a framework to “identify, measure and manage the social and environmental impact of investors’ actions and report their impact” as well as provide investors with “impact data” that can inform their investment decisions.
The new metrics are grouped into approaches such as gender-specific services; increasing equality through financial inclusion; and
MICROCAPITAL BRIEF: EBRD, Green Climate Fund Lend $21.6m to Crédit du Maroc for SMEs in Morocco to Improve Energy Efficiency, Value Chains
Crédit du Maroc, the local member of the France-based Crédit Agricole Group, recently gained access to loan funding of up to EUR 20 million (USD 21.6 million) from the UK-based European Bank for Reconstruction and Development (EBRD) to on-lend to small and medium-sized enterprises (SMEs) in Morocco. EBRD sourced