FinDev COVID-19 Update | 03 - 16 Jun 2021
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- According to a recent World Bank analysis, the shift to digital channels during the pandemic has helped reduce the average cost of remittance transfers. Also, the global partnership on migration and development, KNOMAD, highlighted last month the resilience of the remittance sector, despite the initial projected decline in remittance flows.
- In addition to having a good social protection system in place, delivering social assistance during crises is more efficient where there are comprehensive ID systems, high levels of financial and digital inclusion, and legislation that supports interoperability and data-sharing, among other enablers, according to global think tank ODI.
- In Vietnam, cashless transactions have grown significantly during the pandemic, with mobile payments increasing by 86 percent in volume and 123 percent in value year-on-year in the first four months of 2021, and QR code payments increasing by 96 percent in volume and 182 percent in value.
- In Nepal, however, digital payments spiked during the pandemic but the country’s financial institutions have not yet managed to use digital channels or partner with fintechs to expand their portfolios and explore new products and customers.
- As Sri Lanka faces a third wave of COVID-19, women-headed households are particularly vulnerable and at risk of becoming indebted from microfinance loans.
- The State Bank of Pakistan has extended COVID-19 relief measures for financial institutions and account holders to 31 Dec 2021.
- Kazakhstan’s leading MFI will receive up to $25 million in financing from the IFC to MSEs recover from the impact of the pandemic.
Some articles and knowledge resources referenced in this section are in French.
- A survey of 25 MFIs in Sub-Saharan Africa found that while about half have been able to resume pre-pandemic levels of activity, 80 percent were unable to meet their disbursement targets in the first quarter of 2021, primarily due to customers’ reluctance to commit to new loans.
- The pandemic’s economic toll is expected to slow down progress in access to electricity and cause payment delays in the region. The International Renewable Energy Agency estimates that about 17 million people in Sub-Saharan Africa, or about 3 percent of the region’s currently connected population, may no longer be able to afford electricity.
- Household incomes in Uganda have improved significantly but as of February 2021 still had not recovered to pre-pandemic levels, according to a survey by the Uganda Bureau of Statistics.
- Nigeria was unable to reach its 2020 goal to increase the number of people with access to financial services, partly due to the pandemic and the difficulties in reaching its rural population. Almost 36 percent of adults had no access to formal financial services at the end of 2020, a figure little changed from two years prior and far from the government’s goal of 20 percent.
For more on Africa, check out the latest Portail FinDev Biweekly Update in French.
Latin America and the Caribbean
Most articles and knowledge resources referenced in this section are in Spanish.
- El Salvador became the first country in the world to pass a law making bitcoin a legal tender. The government hopes that Salvadorans who send remittances from abroad will increasingly use bitcoin given its potential to make transactions faster and cheaper. Major remittance providers have shown caution, however, pointing out low acceptance rates and high operational complexity. International organizations have also shown concern citing the cryptocurrency’s climate impact and lack of transparency.
- Economic activity in Latin America and the Caribbean is expected to grow by 5.2 percent in 2021 and 2.9 percent in 2022, according to the World Bank. However, a full recovery to pre-pandemic levels will be delayed in much of the region, especially in economies that rely heavily on tourism.
- A new report by ECLAC emphasizes the need to design adequate regulatory frameworks that help establish and protect social and labor rights of digital platform workers in the region.
- Fintechs are growing and expanding in Mexico. The SME lending fintech Credijusto has become the first Mexican fintech to buy a regulated bank, Banco Finterra. The country also has two fintech startups (Clip and Bitso) valued at more than $2 billion.
For more on LAC, check out the latest Portal FinDev Biweekly Update in Spanish.
Some articles and knowledge resources referenced in this section are in French and Arabic.
- The Somali bank IBS launched a microfinance project targeting youth, a segment with high unemployment rates, especially during the COVID pandemic. In a new $3.5 million venture, the bank gave more than 7,000 young beneficiaries interest-free loans to start small and medium-sized projects.
- Funding for Egyptian micro-enterprises has doubled in the past seven years, helping create an estimated 1.6 million jobs, according to the Egyptian Enterprise Development Agency. Recently, the National Bank of Egypt received $100 million from the European Investment Bank to support MSMEs affected by the COVID-19 pandemic.
- liwwa, a Jordanian fintech that lends to small businesses, signed a $2.2 million debt finance agreement with Triodos Fair Share Fund and Triodos Microfinance Fund to continue supporting SMEs in Jordan as they recover from the economic impact of COVID-19.
For more on the Arab world and resources in Arabic, check out the latest FinDev Update in Arabic.
Blogs & Opinion
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