Author: e-MFP
e-MFP’s role during the COVID-19 pandemic & lessons from the European Microfinance Award on crisis contexts
These are frightening and unprecedented days. In response, many are looking for ways to provide relevant, actionable support. News, blogs, and webinars - well-intentioned as they may be - feel like they’re creating information overload. Yet it’s clear that in a rapidly evolving situation, information is critical. At e-MFP, we want to add value and support where we can, especially to our members, and avoid adding to the noise when what everyone needs is focus, clarity and purpose. We’d like to use our core strengths - facilitating exchange, connecting stakeholders and being a clearing-house for discussion - to help the sector (and especially our members) prepare, weather this crisis, and eventually recover and rebuild.
In the coming weeks and months, e-MFP will be re-focusing several work streams towards the COVID-19 response. The Financial Inclusion Compass sector-wide survey will be brought forward, and will be specifically focused on how stakeholders are triaging their challenges and what they see as the most critical interventions needed - and by whom. European Microfinance Week will be significantly adapted to focus on this topic. The current European Microfinance Award on Encouraging Effective and Inclusive Savings will collect examples of how savings can increase resilience to the kind of health and financial shocks that microfinance clients and SMEs are about to face. We would like to hear from our members what e-MFP can do to support them, and we stand ready to offer that support where we can.
In the meantime, we think it’s worth going back a few years to the 2015 European Microfinance Award, on microfinance in post-disaster, post-conflict areas and fragile states. The winner, Crédit Rurale de Guinée (CRG), won that Award for its response to the Ebola outbreak - an especially pertinent case study for others right now. We published the annual ‘European Dialogue’ on the subject in 2016, entitled Resilience & Responsibility, available (along with various other excellent materials) on the FinDev Gateway COVID-19 Hub and CGAP’s page on lessons from past crises. Within our paper, e-MFP provided case studies of the ten Award semi-finalists. Each of them provide useful insights into how FSPs can respond to challenging contexts. CRG’s is especially useful.
CRG is a microfinance bank that established operations in 1989 in Guinea, serving mostly rural members. In December 2013, the most widespread epidemic of the Ebola virus in history began in Guinea and spread to Liberia and Sierra Leone. By May 2015, Guinea had recorded 3596 cases with 2390 deaths. CRG was badly hit: 123 clients and 4 staff died initially, and this was compounded by changes in behaviour and economic downturn, as fear of the disease spread and workplaces were shut down temporarily, particularly in forested areas, resulting in workers unemployed and services to fragile clients being suspended.
At the beginning of the outbreak, CRG took health and safety measures directed at beneficiaries and staff. All head office and network branches were equipped with sanitary kits (chlorinated water and soap for hand washing and infrared thermometers). A national awareness raising campaign was delivered on the risks associated with contracting the virus and on prevention, with over 4,000 participating.
But perhaps the more relevant lesson from CRG was its response to the clients’ financial needs. A mobile cash transfer service was introduced to reduce the need for dangerous travel in the midst of a deadly epidemic. CRG facilitated savings withdrawals in affected areas, sometimes with transfers from crisis-stricken areas to unaffected ones. To allow clients to access savings, CRG allowed some term deposits to be terminated without penalty. The Macenta and Gueckédou areas (at the centre of the outbreak) saw over EUR 500,000 in cash withdrawals between August and December 2014. Loan rescheduling was offered for those borrowers who could not continue their business operations; a new loan was offered to help them re-start, typically between 60 and 600 Euros, for one year.
“A post-disaster or post-conflict context has many effects. It increases the risk of poverty traps over the short and long term. Poor households’ incomes decrease, productivity of economic activities decreases, investments are impaired, market opportunities are reduced, trust and social relations are weakened, and health, housing and shelter conditions are worsened. That is, poverty is not just a household-level consequence of a crisis; but the whole community and economic value chain is affected; the re-establishment of normal socio-economic conditions is undermined. A negative feedback loop of poverty traps can emerge: incomes fall and become more volatile; productivity decreases; markets worsen; infrastructure decays; movement of goods deteriorates; and social cohesion suffers.” - Resilience & Responsibility, p.5.

Ebola is a different virus from COVID-19, of course. The latter is a pandemic, whereas Ebola remained regional, and likewise its transmission is very different, which will have implications for how humans can safely interact – and transact. But CRG shows us all that MFIs can be flexible and stay relevant to their clients even under the most difficult circumstances. Whatever the differences in their contexts, CRG and the other institutions profiled in that paper (and many thousands more) are now going to have to face another challenge - a common challenge. At e-MFP, we’re confident that in the weeks and months ahead we’ll see examples of bravery, prescience, generosity and imagination in facing this threat, protecting the most vulnerable clients’ health and livelihoods and keeping these institutions alive.
In Resilience & Responsibility we sought to extract several factors that between them cover the approaches those ten institutions took in dealing with their radically different situations. Those nine factors were: Immediate Humanitarian Response; Adapting Core Financial Services; Awareness Building & Psychological Support; Innovating with Products; Planning Ahead; Making Partnerships; Taking Care of Staff; Ensuring Financial Sustainability; and Leading by Example. Detailed examples of how these work in practice can be found in that paper, and we expect that the various responses that emerge in the coming months will share common elements with these. For sure, these lessons can and hopefully will inform what MFIs (and the organisations that support them - MIVs, DFIs, fintechs and TA providers, among others) can do to protect institutions’ and clients’ health and livelihoods.
In the coming weeks and months, e-MFP will be sharing our new work and publishing members’ news and ideas on what they think are the principles that should underpin the sector’s COVID response. We’re able and willing to coordinate activities among members if that’s needed and stand ready to support you and the sector in any way we can.
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