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Author: e-MFP
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 Kompanion Bank in Kyrgyzstan, a good and long-time friend of e-MFP, having been a winner of the European Microfinance Award in 2014. Via an email exchange, Margarita Cherikbaeva, CEO, brought us up to speed on the situation on the ground: As of morning May 20, there were 1,322 coronavirus infection cases in Kyrgyzstan, 37 cases for the last 24 hours. 949 people recovered (68.3% of the total number of registered COVID-19 cases). Analysis shows a downward trend starting from April 16. An increase was observed from April 5 to 20. The highest numbers were registered on April 11-12. The number of cases has started to decrease since end of April. Regarding the impact of COVID-19 on the economy of the Kyrgyz Republic, the Ministry of Economy projects a 6.8% decline in the annual GDP due to self-isolation.

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Author: e-MFP
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 Kashf Foundation in Pakistan, a good and long-time friend of e-MFP, having been a winner of the European Microfinance Award in 2016. Via an email exchange, Roshaneh Zafar, Founder and Managing Director, brought us up to speed on the situation on the ground: "The novel coronavirus has wreaked havoc in the country. To date 31,728 cases have been confirmed in the country with 691 deaths. The province of Sindh and Punjab have been most impacted by the virus with 12,017 and 11,568 cases respectively. They are followed by KP (4,875), Balochistan (2,061), Islamabad (679) and GB/AJK (442/86). Moreover, as the country grapples with the coronavirus, the economic impact is mounting, with the economy expected to shrink to negative 1-1.5% against an expected growth rate of 2.4% during the current fiscal year. In addition, the imports are expected to decrease by 50-60% and the exports by 10-20%. The employment loss is also estimated at 20%".

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Author: e-MFP
Like many major microfinance markets, the Philippines microfinance sector is suffering from the twin threats of a public health emergency and the mitigation response which entails economic shutdown, both of which disproportionately impact vulnerable population segments and the financial providers that serve them. As part of our efforts to understand the impact of the pandemic on our partners, e-MFP reached out to Alalay sa Kaunlaran, Inc. (ASKI), a good and long-time friend of e-MFP, having been a winner and finalist of the European Microfinance Award on multiple occasions. Via an email exchange, ASKI brought us up to speed on the situation on the ground which has greatly affected the whole community including the microentrepreneur clients of ASKI.

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Author: Daniel Rozas
Liquidity has been foremost on the minds of just about everyone in the financial inclusion sector. Several essays on this site have delved into the topic. The first article in our liquidity series outlined three drivers for illiquidity: deposit withdrawals, operating costs, and maturing debt, and argues that maturing debt presents the greatest risk. But what does the data say? Here we will dig into that, and investigate just how severe the different elements of the liquidity crunch are to different categories of MFI around the world. We don't have access to sector-wide data reflecting the situation right now. Nobody does. But we can get a good view of what may be happening from historical data collected by MIX Market over many years. Let's start with the most basic question. Assume an MFI is operating under complete shutdown, with no repayments, no new disbursements, and no other inflow or outflow of funds - it's operating entirely from cash reserves. How many months would it be able to survive before the money runs out?

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Author: Daniel Rozas - Sam Mendelson
In our first piece in this series "Keeping the Patient Alive - Adapting Crisis Rubrics for a Covid World", we introduced the analogy of the emergency room doctors trying to treat a critically ill patient - a financial services provider (FSP), its staff and clients in lockdown or socially distancing, unable to travel and with incomes collapsing, health expenditures increasing, and some sick or dying. Repayments are close to impossible, and new loan applications are flat. But operational expenses continue, and it’s a race against the clock. In short, this patient is critical. To continue the analogy, ensuring the reciprocal trust and confidence of staff and clients and investors is like treating a patient’s organs, with interventions from pharmacology to surgery to transplant. We’ll get to that, though. For now, the challenges need triage. The patient can’t breathe, so she cannot oxygenate and circulate her blood. This, to come back to our institution, is the critical need for liquidity.

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Author: e-MFP
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.

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Author: e-MFP
“Save money – and money will save you” goes a Jamaican proverb. Variations of this adage exist in countless languages, lauding preparedness, prudence and forethought when managing one’s finances. But the notion goes even further than money. Benjamin Franklin said as much – “By failing to prepare, you are preparing to fail.” It is probably one of the few genuinely universal life tenets. It’s also intuitive. We all have a basic understanding of what savings – or the act of saving – are. You hold back some of what you earn, sacrificing immediate pleasures or opportunities for some future benefit. This benefit can vary from coping with the unknown and unplanned shocks that can throw one’s life into disarray, to more highly planned savings for high-cost but predictable future expenses – a wedding, pregnancy, a deposit for a house, or retirement. Extending these benefits to more of the people who need them most is the topic of the European Microfinance Award 2020 – “Encouraging Effective & Inclusive Savings” – which is now open for applications until April 15. In over 10 editions to date, the €100,000 award has sought to shine the spotlight on organisations innovating in a particular area of inclusive finance. It’s open to providers of all categories and sizes that have demonstrated excellence, creativity and rigour in their initiatives for the vulnerable and financially excluded.

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Author: Johan Bastiaensen - Frédéric Huybrechs
Over the last decade, one of the key rising topics in microfinance has been the sector’s response to environmental challenges, and this will continue to take centre stage. In the recently released Financial Inclusion Compass 2019, ‘Climate Change Adaptation and Mitigation’ is only second to Agri-finance in the New Areas of Focus Index, which asks respondents across the sector to look 5-10 years ahead. In recognition of these rising environmental concerns, the European Microfinance Award 2019 sought to highlight outstanding innovations in Strengthening Resilience to Climate Change. The last press release of European Microfinance Week, and the keynote address from the Award ceremony also called for urgent action on climate change. In this blogpost, we reflect on this timely call for action and question how transformative the financial inclusion sector is when it comes to responding to climate change. We do this on the basis of our past research on this topic and build on some of the messages put forward during the European Microfinance Award 2019 Ceremony.

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Author: Sunita Narain - Centre for Science and Environment India
Climate change could not happen at a worse time in human history. It is clear that things are now spiraling out of control. Every year we are told is the hottest year, till the next year comes around. Then a new record is broken. It is getting worse. From forest fires, to increasing frequency and intensity of storms, to blistering cold waves and spiraling heat. We know something is wrong. Very wrong. But we are so distracted – from trade wars, to Brexit, to immigration, to economic crisis and skirmishes that are raging across our countries – that climate change is not a priority. We simply don’t seem to have the bandwidth to handle it. But we must.

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Author: Elisabeth Rhyne
How should financial institutions approach consumer protection differently when they offer services through smartphones rather than humans? This was the question we posed when the Smart Campaign team first started revising the standards to be applied to digital financial services, especially digital credit. We are very pleased to have launched the new Standards, their accompanying Guidance Document, and the companion Handbook for Regulators. What we didn’t expect, however, was quite how profound the differences would turn out to be. We made significant changes to the standards for all seven Client Protection Principles (the principles themselves remain the same). I want to focus here on the most fundamental: Appropriate Product and Delivery Design.

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