Persistent Credit Risk: a Threat to the Solvency of Microfinance institutions ? – ADA, Inpulse & Fondation Grameen Crédit Agricole Survey

Persistent Credit Risk: a Threat to the Solvency of Microfinance institutions ? – ADA, Inpulse & Fondation Grameen Crédit Agricole Survey

ADA, Inpulse and the Grameen Crédit Agricole Foundation presented the results of their 6th joint round of survey on the effects of the COVID-19 crisis on their partner microfinance institutions around the world.

Due to this context of pandemic, ADA, Inpulse and the Grameen Crédit Agricole Foundation joined forces in 2020 to monitor and analyse the effects of the Covid-19 crisis on their partners. This regular analysis aims to contribute to the construction of strategies and solutions adapted to the needs of their different partners, as well as to the dissemination and exchange of information between the different actors of the sector.

For this 6th survey, responses were collected in the second half of April 2021 from 87 microfinance institutions (MFIs) located in 47 countries

The results show that MFIs’ operations have been reduced or slowed down, with a general decline in their capital levels. Indeed, one out of two MFIs, regardless of size, indicates that they will need capital in 2021. Two trends emerge: MFIs are counting on their current shareholders to cover the losses linked to the crisis. On the other hand, international investors are expected to support their development from this year.

The answers formulated by the partners therefore underline the challenge of recapitalisation needed this year, which will involve all the players in the sector.

To know more about this analyse and read the full report: 6th survey (April 2021)_Persistent credit risk-a threat to the solvency of MFIs.pdf (ada-microfinance.org)

Pour en savoir plus sur cette analyse et voir la rapport complet: Espace médias – Fondation Grameen Crédit-Agricole (gca-foundation.org)

The results were presented during the 52nd Midi de la microfinance/Microfinance Lunchbreak that you can still watch online with English translation available here