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 it occurred during planting season, when they often borrow money to buy inputs such as fertilizer. Despite the challenges, Grassland Chief Operating Officer Hooi Koon Seah argued, “This can be an opportunity where we show our worth and commitment to our mission.”
CD Finance responded by working with an agricultural supplier to lend USD 5 million to farmers. Grassland also boosted lending, and it loosened repayment schedules as well. Much of this was done via digital channels, as loan officers and clients were unable to travel.
Dongwen Liu, the CEO of CD Finance, underscored communication with clients “to have a close connection with them and ask what kind of support we can give to them and help them to recover their abilities gradually.”
Ms Seah said, “Most of all, we want our staff to know that they belong and that the company holds their wellbeing as the highest priority.” For example, both MFIs purchased face masks and cleaning supplies to boost the safety of work environments.
This information appears in a report by US-based NGO Accion that encourages MFIs “to identify possible worst-case situations and determine how they will respond…. By being prepared in advance and unafraid to act quickly and boldly, financial services providers can help their customers stay afloat through an unprecedented challenge.”
Sources and Additional Resources
Accion report
https://www.accion.org/five-crucial-insights-from-china-for-facing-the-pandemic
CD Finance homepage
https://www.cdfinance.com.cn
Grassland Finance Limited homepage
http://grassfin.com
More news on COVID-19
https://www.microcapital.org/?s=covid
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