FinDev COVID-19 Update | 12 - 25 Aug 2021

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Asia

• MFIs in India have been trying new hybrid collections methods, incorporating digital channels into a process which traditionally took place during group meetings, in order to ensure that repayments are not affected by pandemic-related restrictions. Microfinance loan repayment rose to 90 percent in July, after going down to 65 and 75 percent in May and June due to the second wave of COVID-19.
• The pandemic boosted interest in digital banking in the Philippines, prompting the government to open a new category for online-only banks at the end of 2020. The central bank has now issued five licenses and announced that it will stop accepting applications next month and will cap the number of digital bank licenses at seven for now.
• Micro and small enterprises in China are doing significantly better a year after the pandemic began, according to a new Center for Global Development study. Cash flow constraints remain a serious problem, however, with cost increases and weak demand being the main challenges.

Africa

Some articles and knowledge resources referenced in this section are in French.

• 15 MFIs in the West African Economic and Monetary Union were placed under provisional administration at the end of March due to worsening portfolio quality, according to the Central Bank of African States.
• Although employment bounced back in Kenya in the second quarter of 2021, with labor force participation reaching its highest level since the start of the pandemic, more than 25 percent of the households are still seeking additional income-generating activities, according to the latest wave of the World Bank’s phone survey.

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 has begun the installation of 200 bitcoin ATMs that will allow Salvadorans to exchange cryptocurrencies into US dollars and withdraw them in cash. In June, El Salvador became the first country in the world to pass a law making bitcoin a legal tender, raising concerns about the cryptocurrency’s low acceptance rates, high operational complexity, climate impact and lack of transparency.
• The Ecuadorian MFI network, Red de Instituciones Financieras de Desarrollo, says the interest rate caps imposed during the pandemic have led to a decline in the number of microcredit loans in the country, which were estimated to be at their lowest level in 13 years.
• Preference for cash persists among the majority of Bolivians even during the pandemic, according to a new survey conducted by the financial holding group, Credicorp.
• The average interest rate for loans to Mexican SMEs declined from 13.4 percent to 11.1 percent in one year, according to data from the Central Bank of Mexico. However, rates continue to be much higher for small and micro businesses.

For more on LAC, check out the latest Portal FinDev Biweekly Update in Spanish.

Arab World

Some articles and knowledge resources referenced in this section are in French and Arabic.

• UN agencies warned about the swift rise in unemployment in the Middle East and North Africa region; 14.3 million people in the youth and women segments are unemployed.
• Tunisia launched an online registration for low-income families to obtain financial assistance in response to the pandemic.
• Al Mezan Center for Human Rights warned that delays in disbursing aid to families in the Gaza Strip could lead to a hunger crisis. So far, qualifying households have received only two cash payments of $232 in the past nine months.

For more on the Arab world and resources in Arabic, check out the latest FinDev Update in Arabic.