The Will of Microfinance Institutions to maintain their Activities during Covid Crisis
3 February 2021
ADA, Grameen Crédit Agricole Foundation – InFiNe.lu members – and Inpulse have collaborated to monitor and analyse the effects of the Covid-19 crisis for their partner microfinance institutions worldwide. This monitoring was carried out regularly throughout the year 2020 in order to have a better vision of the situation’s evolution.
The authors have published their fifth survey. Responses were collected in the second half of December 2020 from 74 microfinance institutions (MFIs) located in 42 countries in Eastern Europe and Central Asia (EAC-28%), Sub-Saharan Africa (SSA-26%), Latin America and the Caribbean (LAC-23%), South Asia (14%), and the Middle East and North Africa (MENA-9%).
The major constraint that remained was the difficulty in collecting loan repayments, which implied increasing the portfolio at risk. This last point is still valid at year-end, and three quarters of respondents still report an increase in RAP. In added to this is the deterioration of the epidemiological situation in the world in the fall of 2020, as evidenced by the responses gathered in December 2020. The epidemic containment measures taken according to local contexts may once again have consequences on the activities of MFIs and their clients, and a return to normalcy is not yet on the agenda.
However, these new complications and their implications are not new. Thus, they have limited impact on MFIs’ risk indicators.
Despite an unstable context and all the obstacles it entails, the vast majority of the partners expect their activity to grow in the new year.
