The nonprofit BBVA Microfinance Foundation, which was launched by the Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) in 2007, recently responded to the COVID-19 pandemic by offering clients of its six microfinance institutions (MFIs) grace periods of two to four months on outstanding loans, rescheduling of outstanding loans and additional funding. They can also access
Category: Risks
MICROFINANCE PAPER WRAP-UP: “Guidance Note, Business Continuity: Attention Points for Business Continuity for MFIs in View of the COVID-19 Outbreak,” published by ADA
By Hans Hekkenberg et al, published by ADA (Appui au Développement Autonome), March 2020, 20 pages, available at http://www.ada-microfinance.org/download/6423/guidance-note-bc-march2020.pdf
This document lists areas of concern for microfinance institutions (MFIs) regarding their crisis management related to the COVID-19 pandemic. Its objective is to
MICROCAPITAL BRIEF: CFI at Accion, e-MFP, SPTF Launch COVID-19 Discussion Forum for Financial Inclusion Actors
Financial inclusion practitioners, investors and others in the sector are invited to visit
MICROCAPITAL BRIEF: World Bank to Loan $300m to Indonesia for Financial Sector Reform, Including Promoting Long-term Savings, Disaster Microinsurance
The World Bank recently agreed to loan USD 300 million to the government of Indonesia for “financial sector reforms that will help sustain economic growth and achieve the country’s shared prosperity goals.” Planned strategies include increasing the range of
MICROCAPITAL BRIEF: To Help Distribute $4b in COVID-19 Aid, RCBC Rolling Out 2k “ATM Go” POS Devices to Cooperatives, Microfinance Institutions, Rural Banks in the Philippines
The Rizal Commercial Banking Corporation (RCBC) of the Philippines recently partnered with organizations representing over 1,500 financial services providers (FSPs) to give their member FSPs access to RCBC’s ATM Go point-of-service devices to help distribute cash government aid intended to minimize the effects of the COVID-19 pandemic. ATM Go devices are portable, mobile-enabled machines that offer many of the services of traditional automated teller machines (ATMs), such as cash withdrawals, balance inquiries, and transfers of funds to pay bills or buy mobile airtime. RCBC has put 1,250 of the devices in service over the past two years, including to deliver government-to-person
MICROCAPITAL BRIEF: How MFIs Grassland Finance, CD Finance of China Responded to the Pandemic
Because of the lockdown imposed in China due to the spread of COVID-19, “overdue loan payments increased greatly” at Grassland Finance and CD Finance, two microfinance institutions (MFIs) in the country. The timing was unfortunate for farmers because
MICROCAPITAL BRIEF: Microfinance Providers Report Wide Range of COVID-19 Effects via Grameen Crédit Agricole Foundation Survey
From March 11 to March 19, the Grameen Crédit Agricole Foundation, whose head office is in Luxembourg, collected observations from 56 microfinance institutions (MFIs) regarding the effects of COVID-19. Markets are closed, putting traders out of work; and group borrowers’ meetings are canceled. While these are replaced in some instances with door-to-door transactions, other MFIs are reducing in-person transactions to minimize virus transmission. Remittance inflows are down. Tourism enterprises are being asked to return deposits for canceled
MEDIA OF THE MONTH: How to Cope With the Effects of the Pandemic on your Business: Examples from the Field, a Webinar from MFC
This webinar is full of ideas to help mange the impacts of CIVOD-19. The presenters are Laure Coussirat-Coustère of Adie, Roxane Lemercier of microStart, Mirjana Panin of Opportunity Bank Serbia and Kinga Dabrowska of the Microfinance Centre.
This post is part of a monthly series from MicroCapital pointing you to great media on microfinance and other forms of impact investing. Enjoy!
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.
MICROCAPITAL BRIEF: IFC Boosts COVID-19 Response to $8b for Working Capital, Risk-sharing, Trade Finance, “Real Sector” Finance Worldwide; Including $294m Deployed to Target SMEs in Vietnam
The World Bank Group’s International Finance Corporation (IFC) recently increased to USD 8 billion its financial commitment to counter the effects of COVID-19. David Malpass, President of the World Bank Group, said, “It’s essential that we shorten the time to recovery.” He added, “Support operations are already underway, and the expanding funding tools…will help sustain economies, companies and jobs.”
The funding package is divided into four categories, with USD 2 billion allocated each to: (1) cash for
MICROCAPITAL BRIEF: To Reduce Spread of COVID-19 in Kenya, Safaricom Suspends Fees for Smaller M-Pesa Mobile Money Transactions, Boosts Maximum Balance, Opens Toll-free Call Center to Answer Coronavirus Questions
At the urging of Kenyan President Uhuru Kenyatta, the mobile network operator Safaricom has loosened the terms for Kenyans using its M-Pesa mobile money product for at least the next 90 days. This is intended “to reduce the risk of spreading the [COVID-19] virus through the physical handling of cash.” Customers will pay nothing to send amounts of up to KES 1,000 (USD 9.40). In addition, the Central Bank of Kenya is allowing for a daily M-Pesa transaction limit of
MICROCAPITAL BRIEF: EBRD Commits $1.1b as “First Step” in Response to Coronavirus; Targets Include SMEs, Women-owned businesses
The UK-based multilateral European Bank for Reconstruction and Development (EBRD) recently allocated EUR 1 billion (USD 1.1 billion) to provide “immediate support” as a “first step” to addressing disruptions caused by the COVID-19 pandemic. The targets include boosting trade finance, particularly as it can assist small and medium-sized enterprises (SMEs), and providing crisis-management advice to SMEs, especially those led by women. For borrowers experiencing difficulty with repayment, EBRD will
MICROCAPITAL BRIEF: Ghana Increases Bailout of Financial Sector by $471m, Partly to Refund Deposits to Microfinance Institution Customers
The government of Ghana is increasing the total by which it is reimbursing parties impacted by the closure of some of the country’s financial institutions from GHS 2.4 billion (USD 434 million) to GHS 5 billion (USD 906 million), according to a statement attributed to President Nana Akufo-Addo. The new funding is for depositors and others involved with microfinance institutions and
SPECIAL REPORT: In Democratic Republic of Congo, Microfinance Institutions (MFIs) Notch Profitable Year After 2017 Losses, but Concerns Remain that SACCOs “May Disappear” from DRC
According to data from the Central Bank of Congo, the microfinance sector in the Democratic Republic of Congo (DRC) includes 102 microfinance institutions (MFIs), of which 82 are savings and credit cooperatives (SACCOs) and 20 are organized as for-profit firms, such as limited liability companies. These institutions
MICROCAPITAL BRIEF: Central Bank of Sudan Issues Monetary Policy Promoting Financial Inclusion, Competition Among Financial Institutions; Sets $30k MSE Loan Ceiling
Governor 
Badr Ibrahim (pictured) of the Central Bank of Sudan (CBOS) recently announced a new monetary policy intended to reduce inflation, stabilize exchange rates, finance goods produced for export, strengthen financial safety nets, boost financial inclusion and increase competition among financial services providers.
Elkhidir Elamin Mohammed, the managing director of Al-Fal MSE Finance, tells MicroCapital that, “This announcement is motivating financial institutions to innovate and link their investment activities with
MICROFINANCE EVENT: FinovateEurope; February 11-13, 2020; Berlin, Germany
FinovateEurope is one of a series of conferences focusing on financial technology (fintech). The event includes demonstrations of technological advances and a keynote address
MICROCAPITAL BRIEF: Tightened Regulation in Zimbabwe Makes Directors, Officers, Shareholders Personally Liable to Microfinance Institution Depositors in Case of Negligence
A new law in Zimbabwe tightens the requirements for microfinance institutions (MFIs) in the country. Each of Zimbabwe’s 205 MFIs will have to pay a yearly fee to maintain its registration with the government. The law also provides for the creation of a Microfinance Advisory Council (MAC), which will report to Minister of Finance and Economic Development on strategic and governance issues. The council membership will include government officials as well as representatives of the banking industry, the microfinance industry and “a reputable
MICROFINANCE PAPER WRAP-UP: “Handbook on Consumer Protection for Inclusive Finance,” published by Center for Financial Inclusion, New Perimeter
“Handbook on Consumer Protection for Inclusive Finance,” by the Center for Financial Inclusion (CFI) at Accion and New Perimeter, October 2019, 91 pages, available at https://www.centerforfinancialinclusion.org/handbook-on-consumer-protection-for-inclusive-finance
This handbook highlights the importance of having a robust legal and regulatory framework in place to ensure the protection of low-income consumers of financial services via new delivery channels. It is intended to supplement the seven Consumer Protection Principles developed by CFI’s Smart Campaign by highlighting legal
MICROFINANCE PAPER WRAP-UP: “Geographic Diversification and Credit Risk in Microfinance;” by Stephen Zamore, Leif Atle Beisland, Roy Mersland
Published by the Journal of Banking and Finance; October 2019; 38 pages; available at https://www.researchgate.net/publication/336539379_Geographic_diversification_and_credit_risk_in_microfinance
In this paper, the authors use 18 years of data on 657 microfinance institutions (MFIs) in 88 countries to investigate whether there is a correlation between MFIs’ credit risk and their geographic diversification. The authors measure credit risk using indicators including 30-day portfolio-at-risk ratios