Paper

MFIs on the Rebound, but Will It Last?

A look at how COVID-19 is affecting the microfinance sector’s portfolio quality and financial health

From February to April 2020, microfinance institutions (MFIs) within the Symbiotics portfolio saw disbursements and repayments contract sharply across all regions. Disbursements fell to around 20 percent of year-on-year figures as MFIs curtailed new lending amid widespread uncertainty about the development of the pandemic and the economic impact of lockdown measures. Over the same period, repayments by existing borrowers dropped to around half of normal levels due to mandatory or voluntary moratoria extended by MFIs to their clients.

There has been a steady rebound since May, with both disbursements and repayments growing back at a pace nearly comparable to the initial decline in every region. However, the rebound may be waning; July and August data show both disbursements and repayments leveling off or declining again. 

This snapshot is the first in a series to be published by CGAP and Symbiotics, offering regular updates on how COVID-19 is affecting the microfinance sector’s portfolio quality, financial health, and ability to serve excluded clients. All or most of the data shown and referenced come from the Symbiotics portfolio of over 300 MFIs worldwide.

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