The Foundation publishes its report “The impact of the crisis on microfinance institutions”

The Covid-19 pandemic has affected all economies, particularly impacting fragile economies and the most vulnerable populations.

The Grameen Crédit Agricole Foundation has focused on the unprecedented effects of this global crisis on microfinance institutions. An initial survey was launched in March 2020 among all our partners to understand how they were adapting to the repercussions of the pandemic, which were already being felt on their activities. By partnering in the months that followed with two other major players in inclusive finance, ADA And Inpulse, we have extended the scope of these studies to more than a hundred institutions present on 4 continents: Africa, South America, Asia and Europe. In total, 6 surveys have been conducted since the inaugural questionnaire in March.

Through this publication you will discover the results of these studies summarized in 3 sections:

Adapt quickly to operational constraints

Surveys conducted throughout 2020 revealed three major challenges: the inability to meet with clients in person, limited repayment collections, and constraints on disbursing new loans. To address these challenges, MFIs acted proactively and appropriately, reflecting the organizations' strong resilience. However, not all were impacted equally. This document traces the evolution of these constraints and the measures implemented to address them.

A significant and lasting financial impact

The operational constraints encountered inevitably had significant financial repercussions. Among them, two major consequences were visible in almost all MFIs: an increase in the portfolio at risk (PAR) and a reduction in outstanding loans. These two phenomena fluctuated throughout the year depending on local contexts, and other financial difficulties may have arisen occasionally. The analysis of performance indicators, detailed in this document, allows us to visualize the lasting impact of the crisis.

Future prospects

In this context, the majority of MFIs have resisted and shown optimism. Among the areas considered for the coming years are a return to portfolio growth as well as the opening up to new products and services, and even new markets, starting in 2021. You will discover throughout the pages other adaptation measures explored by MFIs, demonstrating a reassuring desire for the future of the sector. We must nevertheless remain vigilant in the face of the instability of the current context. This is why we are maintaining our approach of closely monitoring the crisis with our partners in 2021, on a quarterly basis.

Download the report