As part of our efforts to understand the impact of the COVID-19 pandemic on microfinance markets around the globe, e-MFP reached out to Advans CI in Cote d’Ivoire, a good and long-time friend of e-MFP, having been a winner of the European Microfinance Award in 2018. Via an email exchange, Mariam Djibo, CEO, brought us up to speed on the situation on the ground.
e-MFP: What is the current public health and economic situation in your country regarding COVID-19?
Mariam Djibo (MD): To date, there have been 2,477 confirmed cases, of which 95% are in Abidjan, and 30 deaths. The government has built several testing centers in Abidjan and ordered 200 million masks. Given the statistics available and the potential impact of a strong economic crisis, restrictions on gatherings have recently been lifted and schools have been opened outside Abidjan. As of May 15 there is also an ease of restrictions within Abidjan. In terms of the impact of the crisis on economy, the government estimates that GDP growth for 2020 will be down to 3.5% from 7%. SMEs and the informal sector will be amongst the most impacted by the crisis due to (i) disruptions on the supply chain with the closing of borders, (ii) decrease in consumer demand for non-essential goods, (iii) closure of different types of businesses (such as hotels and restaurants) due to government restrictions.
All our clients will be affected even though to different extents. Our analysis shows that 33% will be severely impacted (hotels, restaurant, schools, clothing, hairdressers…), 45% will experience a moderate impact. For 15% there will be no negative consequences and these clients could even benefit from the situation (such as food distribution or telecom retailers). Trading activities are impacted by interruptions in the supply chain for imported goods (from China/Europe/Dubai), transport activities are struggling with lockdown and reduced movement, agricultural activities will be impacted by an inevitable lack in demand internationally (cashew, cocoa, cotton), while all activities will suffer from a decrease in consumer spending. Each micro-entrepreneur has between 5 to 10 dependents so reduced revenue for one individual will have a knock on effect.
e-MFP: How have you supported clients and staff during this crisis?
MD: Protecting our staff and clients is our main concern and highest priority ever since the crisis started. We have been raising awareness on preventive measures among staff, supplying protective medical equipment such as hand sanitizer, gloves and masks; we have also installed hand wash basins in front of branches. In order to limit staff exposure, field visits were put on hold, the number of staff in branches was reduced to 30% with two teams working on rotation. 50% of staff at head office have been working remotely and the rest are only physically present 2 or 3 days a week. We have retained all current staff and maintained payment of salaries. We have also been focusing on our internal communication with regular emails from Management, WhatsApp groups facilitating communication on all levels and across the company and Zoom digital meetings. Our HR team have made individual calls to all our 600 staff to reassure them and listen to their needs and feedback.
Raising awareness on preventive measures amongst clients has also been a main priority with information being shared in branches as well as online on social media. To avoid clients coming to branches unnecessarily, we have been promoting our alternative channels such as the service Mobilité and our third party agent services.
We have introduced grace periods on outstanding loans so as to help our clients get through the crisis by taking away the burden of repaying their loan. We have also kept in continuous contact with our customers through regular calls. The main objective of these calls is to see how clients’ health and businesses are impacted by the crisis and to better understand their needs at this time. This has been facilitated by the implementation of a new digital follow up tool which enables us to plan follow up calls and save client information on a smartphone.
A crucial measure in supporting our agricultural clients was the uninterrupted funding of the agricultural input campaign (the application of fertilizers and phytosanitary products cannot be delayed) and the continuation of our financial inclusion program for cocoa farmers. Finally we have also developed a dedicated emergency credit offer, Advans Oxygène, to support customers in need of help for their personal expenses.
e-MFP: What kind of support (financial or otherwise) have you received from your investors, funders and any other relevant partners?
MD: There is a common goal in the industry to support microfinance clients and therefore microfinance institutions through this crisis. Our partners are supportive and have made it clear that, should we be in need, potential additional financing or flexibility on financial covenants is possible. Some also offer technical assistance funding to support specific projects related to the crisis or needs arising from the crisis such as digitalisation of our processes, IT security, e-learning training, etc.
e-MFP: What coordinated response have policy-makers, financial supervisors or networks taken to protect the financial inclusion sector in your country?
MD: 40% of the population in Cote d’Ivoire is banked thanks to microfinance institutions and telecommunications companies. Money transfers below 5 000 FCFA are now free and mobile money transaction thresholds have been increased. Furthermore, the government has launched a campaign to limit the rise in prices of basic necessities. There are also open discussions between the regulator and the Microfinance Association on how to best support microfinance actors during the crisis and increased financing options for MFIs from local banks.
Some of the concrete measures introduced to support businesses include:
A FCFA 20 billion dedicated fund for the informal sector (mobile money payment of FCFA 75,000 per quarter to 177,000 households for a total of FCFA 13 billion from May 2020 on)
A dedicated FCFA 40 billion fund to help SMEs
A dedicated FCFA 50 billion fund to help agricultural producers
A solidarity fund of FCFA 50 billion
A special fund of FCFA 30 billion for large companies
e-MFP: What do you see as the top priorities to support and protect your clients from the economic consequences of the Covid-19 crisis?
MD: We will keep communicating on protective measures and applying them in our contact with customers in order to make sure they remain safe. We are making sure we stay in close contact with our clients to understand their needs and how the crisis affects them personally and business-wise so that we can best support them during these challenging times. Customer feedback is already helping us to develop new offers adapted to their current needs such as emergency credits, renewals and top up loans for companies in essential sectors. Coming out of the crisis, we will continue working on tailored credit products and other services in order to meet our customers’ needs as they restart their businesses as best as possible. We hope the government and our partners will support our efforts with financing or guarantee mechanisms as the risk profile of the affected customers will increase.
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Perspectives from the frontline: How Advans CI in Cote d’Ivoire is dealing with the COVID-19 crisis
e-MFP: What is the current public health and economic situation in your country regarding COVID-19?
Mariam Djibo (MD): To date, there have been 2,477 confirmed cases, of which 95% are in Abidjan, and 30 deaths. The government has built several testing centers in Abidjan and ordered 200 million masks. Given the statistics available and the potential impact of a strong economic crisis, restrictions on gatherings have recently been lifted and schools have been opened outside Abidjan. As of May 15 there is also an ease of restrictions within Abidjan. In terms of the impact of the crisis on economy, the government estimates that GDP growth for 2020 will be down to 3.5% from 7%. SMEs and the informal sector will be amongst the most impacted by the crisis due to (i) disruptions on the supply chain with the closing of borders, (ii) decrease in consumer demand for non-essential goods, (iii) closure of different types of businesses (such as hotels and restaurants) due to government restrictions.
All our clients will be affected even though to different extents. Our analysis shows that 33% will be severely impacted (hotels, restaurant, schools, clothing, hairdressers…), 45% will experience a moderate impact. For 15% there will be no negative consequences and these clients could even benefit from the situation (such as food distribution or telecom retailers). Trading activities are impacted by interruptions in the supply chain for imported goods (from China/Europe/Dubai), transport activities are struggling with lockdown and reduced movement, agricultural activities will be impacted by an inevitable lack in demand internationally (cashew, cocoa, cotton), while all activities will suffer from a decrease in consumer spending. Each micro-entrepreneur has between 5 to 10 dependents so reduced revenue for one individual will have a knock on effect.
e-MFP: How have you supported clients and staff during this crisis?
MD: Protecting our staff and clients is our main concern and highest priority ever since the crisis started. We have been raising awareness on preventive measures among staff, supplying protective medical equipment such as hand sanitizer, gloves and masks; we have also installed hand wash basins in front of branches. In order to limit staff exposure, field visits were put on hold, the number of staff in branches was reduced to 30% with two teams working on rotation. 50% of staff at head office have been working remotely and the rest are only physically present 2 or 3 days a week. We have retained all current staff and maintained payment of salaries. We have also been focusing on our internal communication with regular emails from Management, WhatsApp groups facilitating communication on all levels and across the company and Zoom digital meetings. Our HR team have made individual calls to all our 600 staff to reassure them and listen to their needs and feedback.
Raising awareness on preventive measures amongst clients has also been a main priority with information being shared in branches as well as online on social media. To avoid clients coming to branches unnecessarily, we have been promoting our alternative channels such as the service Mobilité and our third party agent services.
We have introduced grace periods on outstanding loans so as to help our clients get through the crisis by taking away the burden of repaying their loan. We have also kept in continuous contact with our customers through regular calls. The main objective of these calls is to see how clients’ health and businesses are impacted by the crisis and to better understand their needs at this time. This has been facilitated by the implementation of a new digital follow up tool which enables us to plan follow up calls and save client information on a smartphone.
A crucial measure in supporting our agricultural clients was the uninterrupted funding of the agricultural input campaign (the application of fertilizers and phytosanitary products cannot be delayed) and the continuation of our financial inclusion program for cocoa farmers. Finally we have also developed a dedicated emergency credit offer, Advans Oxygène, to support customers in need of help for their personal expenses.
e-MFP: What kind of support (financial or otherwise) have you received from your investors, funders and any other relevant partners?
MD: There is a common goal in the industry to support microfinance clients and therefore microfinance institutions through this crisis. Our partners are supportive and have made it clear that, should we be in need, potential additional financing or flexibility on financial covenants is possible. Some also offer technical assistance funding to support specific projects related to the crisis or needs arising from the crisis such as digitalisation of our processes, IT security, e-learning training, etc.
e-MFP: What coordinated response have policy-makers, financial supervisors or networks taken to protect the financial inclusion sector in your country?
MD: 40% of the population in Cote d’Ivoire is banked thanks to microfinance institutions and telecommunications companies. Money transfers below 5 000 FCFA are now free and mobile money transaction thresholds have been increased. Furthermore, the government has launched a campaign to limit the rise in prices of basic necessities. There are also open discussions between the regulator and the Microfinance Association on how to best support microfinance actors during the crisis and increased financing options for MFIs from local banks.
Some of the concrete measures introduced to support businesses include:
e-MFP: What do you see as the top priorities to support and protect your clients from the economic consequences of the Covid-19 crisis?
MD: We will keep communicating on protective measures and applying them in our contact with customers in order to make sure they remain safe. We are making sure we stay in close contact with our clients to understand their needs and how the crisis affects them personally and business-wise so that we can best support them during these challenging times. Customer feedback is already helping us to develop new offers adapted to their current needs such as emergency credits, renewals and top up loans for companies in essential sectors. Coming out of the crisis, we will continue working on tailored credit products and other services in order to meet our customers’ needs as they restart their businesses as best as possible. We hope the government and our partners will support our efforts with financing or guarantee mechanisms as the risk profile of the affected customers will increase.
The European Microfinance Platform (e-MFP) is the leading network of European organisations and individuals active in the microfinance/financial inclusion sector in developing countries. Now in its tenth year, it has grown to 130 members from all geographic regions and specialisations of the European microfinance community.
e-MFP fosters activities which increase global access to affordable, quality, sustainable and inclusive financial services for the un(der)banked by driving knowledge-sharing, partnership development and innovation. The Platform achieves this through its diverse publications, numerous year-round expert Action Groups, the annual European Microfinance Week which attracts over 400 top stakeholders representing dozens of countries from the sector, the prestigious annual European Microfinance Award and many other activities.
e-MFP's vision is to become the microfinance focal point in Europe linking with the South through its members.