Challenges and Risk of Microfinance Sustainability Amid COVID-19 Pandemic Crisis

The current scenario caused by the coronavirus disease (COVID-19) portrays that the microfinance sector has been paralyzed in terms of the financial stress of the microfinance institutions (MFIs) and their clients, especially poor borrowers and micro-entrepreneurs. Contextually the twin problem in the battle against COVID-19 in this sector includes economic revival of the microfinance sector from liquidity crunch and survival of the actors from the economic and medical consequences of COVID-19.

This study aims to investigate the challenges that MFIs are facing during the pandemic from institutional perspectives and to diagnose the energetic of social relations of the poor individuals in the battle against COVID-19 from MFI’s clients' view, especially poor borrowers and micro-entrepreneurs. It also attempts to provide a slew of recommendations for microfinance stakeholders in general, and toward ushering in a resilient ecosystem in the microfinance.

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By Ali Saleh Alshebami, Varadarajan Rengarajan, Reza Widhar Pahlevi, Jamaliah Said , Wahyuni Rusliyana Sari