OPINION: Can Microfinance Institutions (MFIs) survive the Covid19 onslaught? The extended lockdown across the world may spell disaster for many of Micro-Finance Institutions’ clients with many of them having nothing to return to after the lockdown. This subsequently threatens their ability to pay back loans to their lenders, setting off a chain of failure down the entire chain. Nathan Were, an Access to Finance Specialist at the World Bank Group delves into possible interventions by various stakeholders in the micro-finance chain, to ensure vital credit keeps flowing to the world’s low-income people who need it most
Tafumba Susan, an informal trader at her stall recently. Prolonged lockdowns will impact on such informal businesses and their ability to repay microfinance loans
By Nathan Were
Microfinance Institutions (MFIs) service about 140 million low-income people worldwide, with savings and credit services, according to the MIX market – a data repository for MFIs. The MIX also reports that as of 2018, the value of their credit portfolios was USD124 billion with 80% of the MFI customers being women; 65% operating in rural areas and 35% urban and largely in
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