FinDev Interview

One Year On: What a Year of Surveys Tell Us About COVID-19 and Microfinance

Maxime Borgogno of Grameen Crédit Agricole Foundation shares why most MFIs they surveyed remain optimistic about the future
Maxime Borgogno

Maxime Borgogno is the Investment Manager for the Asia and Central Europe region at Grameen Crédit Agricole Foundation. Before joining the Foundation, Maxime was involved in the microfinance and humanitarian fields in Togo, France and Haiti. Maxime holds a master’s degree in Finance at Audencia Business School in Nantes, France.

FinDev: Since the beginning of the pandemic, Grameen Crédit Agricole Foundation has been monitoring how the microfinance sector is responding to the crisis caused by COVID-19. One year later, what have you learned?

Maxime: While the immediate consequences microfinance institutions (MFIs) faced were an increase in portfolio at risk and a reduction in their portfolio, the operational crisis did not lead to a total failure of the sector as feared at the beginning. In fact, we have seen many MFIs proactively adapting to the new context: they took adequate management measures while maintaining a responsible approach with their clients. Only a small proportion of surveyed institutions had to lay off staff during the crisis, and the ones in the most affected countries have successfully transitioned to remote systems. Most MFIs implemented loan restructuring to relieve affected clients. Some, especially in Southeast Asia, provided customers with emergency kits (food, sanitary equipment, etc.). They even explored new opportunities such as digital channels for loan repayment to adapt to the situation.

In general, MFIs remain optimistic about the future, based on a good understanding of current challenges and the experience built in 2020. While the crisis is not over and there are still challenges ahead, the sector has the capacity to meet them.

FinDev: What are some of the key challenges that lie ahead? Why do you think the sector has the capacity to overcome them?

Maxime: The situation remains unpredictable and depends on the country. An MFI may come to face significant operational constraints very quickly, which will limit its activity. The latest data shows that nearly 75 percent of MFIs are facing a higher risk portfolio than before the crisis. Therefore, they will have to find a balance between carefully managing this risk while continuing to disburse new loans to their clients. It is now clear that the COVID-19 crisis has disrupted certain sectors, companies’ structures and ways of doing business. MFIs will need to account for these major changes in their strategy for the coming years.

Over the past year, we have seen MFIs remain fully committed to their social mission. They have proven their resilience and capacity to adapt during an unprecedented crisis. With poverty levels increasing due to the crisis, the mission of microfinance is more relevant than ever. 

2020 was a historic year that demonstrated the resilience of the microfinance sector.

Maxime Borgogno, Grameen Crédit Agricole Foundation

FinDev: How did you monitor the situation over the past year?

Maxime: We launched the first monthly survey in March 2020 with 75 MFIs we support. The objective was to gather first impressions on the situation as well as the potential impact on their activities and their clients. In June 2020, we joined forces with ADA and Inpulse to expand the reach of the survey to more than 100 MFIs, including in Latin America and the Caribbean, where the Foundation does not have a presence. Since September, we have moved towards a quarterly format to avoid overloading the institutions in a period of resumption of their activities. The next survey will be in March.

The survey results, as well as other articles related to the COVID-19 crisis, are available on the Covid-19 Observatory, a space created by the Foundation at the onset of the pandemic.

FinDev: Microfinance institutions often don’t have the capacity to respond to surveys, especially when they have a major crisis to deal with. What helped you to continue gathering data among them?  

Maxime: From the very beginning, we chose not to ask MFIs detailed financial information, but rather to gather their impressions and observations on the impact of the crisis. We deliberately kept the number of questions low and made sure they were as clear as possible. We also avoided requesting the same information they send us in their regular monthly reports.

We insist on a high level of communication with our partners, so we share the results of the surveys with them as soon as they are available and remain open to their feedback in this process. Comments from our respondents have helped us to adapt the wording of the questions and the content of the questionnaire. We believe that their involvement in the process is a key motivator for our partner MFIs to continue participating in the survey.

FinDev: How do you see this crisis shaping the future of microfinance? Are you worried about the future of the sector?

Maxime: 2020 was a historic year that demonstrated the resilience of the microfinance sector.  MFIs innovated and strengthened their services to protect their clients. At the same time, lenders and other stakeholders coordinated among themselves to adopt the most suitable measures to support MFIs. The last survey we conducted on the impact of the COVID-19 crisis reveals that most institutions expect their activity to grow in 2021, in terms of both portfolio volume and number of clients.

However, many of the most affected institutions will need support from their shareholders and lenders. As credit risk gradually translates into losses in 2021, the responsiveness of investors will be fundamental and is a forthcoming topic for the Foundation’s Covid-19 Observatory.

The crisis is not yet behind us, but we are encouraged for the future of the microfinance sector. Digital transformation, coordination between stakeholders and innovation will be essential to strengthen the resilience and impact of microfinance. 


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Clara Arthur , CGAP, Ghana
18 March 2021

In Ghana, some MFI's have recently digitized their ops and thereby reducing their costs as the pandemic proved digitization was the way to go. it's better to have a lean operation compared to having numerous branch outlets. I actively follow a number of MFIs in Ghana and I was surprised they didn't lay off any staff during this pandemic. Will this hold true from Q3, 2021 looking through the crystal ball?

18 March 2021

As microfinance practitioner in Cameroon, we feared the impact of the crisis to be more devastating to our credit unions and members as the rate of infection and mortality started raising in March 2020.
Though portfolio at risk was on the rise due to the fact that most follow up activities on the field were reduced and lending became difficult to carry out, surprisingly, we noticed an improvement on the liquidity side as treasury increased by 7% at the end of September 2020.
The regulator (COBAC) also contributed to soften the pressure in the market by waiving some prudential dispositions that also boosted our morale. For it would have been difficult to meet up with the prudential norms in the context of Covid-19.
As a way to survive, we reviewed our business approach and decided to reduce high risk activities (loans) and focus more on remittances and electronic transactions. The net result has witnessed an improvement.

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