COVID-19 FinDev Weekly Update | 24-30 April 2020
FinDev Gateway has created this COVID-19 weekly update with the latest and most relevant knowledge resources for financial inclusion as they become available. Sign up to receive FinDev's weekly update each Friday with a summary of the main issues covered during the week.
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Investors issue a coordinated response to COVID-19. Nine Microfinance Investment Vehicles (MIVs) with $15 billion of assets under management, invested in more than 80 emerging markets, have signed a memorandum of understanding on debt refinancing to support the microfinance sector during the COVID-19 pandemic. The European Microfinance Platform (e-MFP) calls on the financial inclusion community to engage in discussion on this topic.
How long can MFIs survive before the money runs out? A recent analysis by Daniel Rozas of the e-MFP finds that nearly 34 percent of small, credit-only MFIs, with total assets of less than $5 million, would not survive for more than one month in a full shutdown. On the other hand, more than half of deposit-taking MFIs could cover three months of operating expenses and at least 20 percent of deposits.
Growing concerns over an impending global humanitarian and food crisis. The World Food Program warns that 265 million people could be pushed to the brink of starvation by the end of the year. An analysis by ISF Advisors and the Rural and Agricultural Finance Learning Lab shows how COVID-19 crisis might push rural families back into extreme poverty and cause food crises and instability. Authors call for careful government treatment of last mile credit lines and protection of financial access for the most vulnerable to avoid a collapse of rural credit markets. The World Bank’s AgriFin program is conducting a survey in English and French to gather observations related to the impact of COVID-19 on agriculture finance.
Across Asia, governments are encouraging the switch to digital payments. China rolled out a digital currency, and the Philippines Central Bank urged citizens to take advantage of e-payment services such as PESONet and InstaPay. Remittance senders are using digital options, such as Bangladesh’s bKash—an online-to-wallet money transfer service.
A recent analysis by the Yale Economic Growth Center finds that more than half of poor women in India who lack access to a bank account or ration card may not be included in the government’s emergency COVID-19 relief cash transfer program. Authors argue that in such cases distributing food may be more effective than cash transfers.
After the Reserve Bank of India issued a three-month loan moratorium due to COVID-19, MFIs are struggling to contact some of their borrowers, and are appealing to the Securities and Exchange Board of India to instruct credit rating agencies to delay ratings for three months.
Fintechs in the region are gathering support. Hong Kong alternative lender Oriente raised $50 million to expand to new markets such as Vietnam. Singapore Fintech Association Support partnered with Razer Fintech, a Southeast Asian offline-to-online digital payment network, to leverage Razer’s $50 million COVID-19 Support Fund.
As part of its overall funding of $20 billion for COVID-19 responses in the region, Asia Development Bank announced it would provide $200 million to support the Philippine government’s effort to provide emergency cash subsidies to vulnerable households, and $1.5 billion for India to support priorities such as disease containment and prevention, as well as social protection.
Some articles and knowledge resources referenced in this section are in French.
The Central Bank of West African States (BCEAO) has announced a series of measures to support the microfinance sector. Bank loans granted to MFIs are now eligible for Central Bank refinancing; MFIs can extend the maturity of their clients' loans without interest or penalties.
Protecting employees and clients is crucial in crisis management. This guide (in French) offers best practice examples for managing human resources and customer relations during and after a crisis.
Food prices have risen in several countries, including Zimbabwe and Burkina Faso. Logistics and social distancing measures have put pressure on food supply chains, particularly in cities. Digital agriculture can ease this adverse impact and help smallholders by improving infrastructure and delivery systems.
In some countries, governments are starting to ease lockdowns. After increasing testing capacity, Ghana is now easing the restrictions. Nigeria will ease measures in several states starting 4 May. In Burkina Faso, merchants protested, demanding reopening of local markets. South Africa will start to lift lockdown measures on 1 May.
In Nigeria, some tech startups are creating welfare initiatives to help those affected by the lockdown through crowdfunding platforms. The Nigerian government has provided cash relief to 3.6 million households.
For more on Africa, check out the latest Portail FinDev Weekly Update in French.
Latin American and the Caribbean
Most articles and knowledge resources referenced in this section are in Spanish.
As cash transfer programs continue to expand in Latin America, the Cash Learning Partnership says that measuring the impact of such programs is important both to determine their effectiveness and guide future policy decisions.
In Peru, thousands of people are returning to the countryside due to lack of work and fear of hunger, reversing a long trend of urban migration, and raising fears about the spread of virus in rural areas.
In Colombia, the Government partnered with Tpaga, a fintech firm, to facilitate individual donations to families that are unable to pay their public electric bill.
The Central America and Caribbean MFI Network (REDCAMIF) and Portal FinDev are planning a webinar highlighting lessons on how digital transformation has positioned financial institutions to better serve their clients during the pandemic.
For more on LAC, check out the latest Portal FinDev Weekly Update in Spanish.
In Lebanon, violent protests erupted this week targeting banks as the Lebanese currency collapsed.
Egypt is asking the IMF for emergency financing under the Fund’s Rapid Financing Instrument (RFI) and a Stand-By Arrangement (SBA).
In Morocco, a special G2P plan targets 4.3 million households headed by informal workers who have lost their jobs due to the lockdown.
The Council of Arab Central Banks and Monetary Authorities Governors issued a statement on 27 April - which marks Arab Financial Inclusion Day - about the importance of expanding digital financial literacy to help with access to financial services in the region.
For more on the Arab world and resources in Arabic, check out the latest FinDev Weekly Update in Arabic.
Blogs & Opinion
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Microfinance Sector Response
For a complete list of publications and to learn how you can share your research with us, visit FinDev's Publications page.
Mobile Money Recommendations to Central Banks in Response to COVID-19
How can regulators ensure that measures taken during the pandemic do not impair the long-term sustainability of mobile money business?
COVID-19 Could Condemn Women to Decades of Poverty
This study reveals how the global pandemic is having a real and immediate economic impact on women in the developing world.
A Majority of India’s Poor Women May Miss COVID-19 PMJDY Cash Transfers
This brief discusses some ideas for how to increase access to the social safety net during a crisis.
COVID-19 Crisis Through a Migration Lens
Update on migration and remittance flows as well as salient policy developments in the area of migration and development.
2020 - Global Report on Food Crises
Analysis of the drivers that are contributing to food crises across the globe, and examines how the COVID-19 pandemic might contribute to their perpetuation or deterioration.
New Data Sources and Information Hubs
COVID-19 Africa Watch
The goal of this site is to showcase what is happening in the region, select and highlight the best impact analysis, and provide a single hub of data and comparative tools.
BIS: Coronavirus (Covid-19)
This page gathers relevant work produced by the BIS, its hosted committees and its stakeholders on the implications of the pandemic for the financial sector and the wider economy.
For the latest news on the impact of coronavirus on financial inclusion, visit our News listing pages.
Cambodian Workers Owe $10 Billion in Microfinance Debt as COVID-19 Wipes out Incomes
With many Cambodians out of work, COVID-19 is also throwing another problem into sharp relief: that of precariously high microfinance debt.
SIDBI Extends Loan Repayment Term to 1-Year for NBFCs, MFIs
Small Industries Development Bank of India has extended the repayment period of loans to non-banking finance companies and microfinance institutions to one year from the 90-day period earlier.
Leading Microfinance and Impact Fund Managers Sign an MOUon Debt Refinancing Coordination Principles to Support the Sector During the COVID-19 Pandemic
BlueOrchard, Developing World Markets, Incofin, Microvest, Oikocredit, responsAbility, Triodos IM, Triple Jump and Symbiotics have signed a Memorandum of Understanding for coordination in response to COVID-19.
Mastercard Builds on COVID-19 Response with Commitment to Connect 1 Billion People to the Digital Economy by 2025
Mastercard this week expanded its worldwide commitment to financial inclusion, pledging to bring a total of 1 billion people and 50 million micro and small businesses into the digital economy by 2025.
Singapore Fintech Association and Razer Fintech Partnered to Support Singapore's Fintech Industry Amid the Pandemic
The partnership aims to address key issues facing the industry, including business continuity, lack of funding, and brand awareness.
Saudi G20 Presidency and the Bank for International Settlements Innovation Hub Invite Global Innovators to Find Solutions to the Most Pressing Financial Regulatory & Supervisory Challenges
TechSprint initiative will support the regulatory and supervisory responses against the COVID-19 pandemic.
For the latest events - hosted by organizations worldwide - exploring the impact of coronavirus on financial inclusion, visit our Events listing page.