CGAP and Symbiotics partner to monitor COVID-19’s impact on MicrofinanceTuesday 17th, November 2020
CGAP and Symbiotics launched a partnership to track and analyze the performance of hundreds of microfinance institutions (MFIs) across the world over the next six months, in an ongoing effort to shed light on how the COVID-19 pandemic is impacting the microfinance sector.
The COVID-19 pandemic has put the microfinance sector under considerable strain, as economic slowdowns have made it difficult for many borrowers to repay their loans. While CGAP’s earlier research on the crisis helped dispel concerns about an imminent liquidity crisis, there are ongoing concerns about microfinance institutions’ portfolio quality, solvency, and ability to continue serving excluded customers amid pressures of the pandemic.
To help fill the void of publicly available data on how this crisis is playing out, CGAP and Symbiotics will be analyzing data on the performance of the more than 300 MFIs in Symbiotics global portfolio.
The first snapshot in the CGAP-Symbiotics series is now available. Among its findings is that expiring moratoria and deteriorating loan portfolios appear to be leading many MFIs to adopt conservative lending practices. While this may be prudent from a risk management standpoint, it raises concerns about the sector’s ability to continue serving low-income clients during the crisis.