COVID-19 FinDev Weekly Update | 10-16 April 2020

FinDev Gateway has created this COVID-19 weekly update with the latest and most relevant knowledge resources for financial inclusion. Below, you will find a quick summary of what FinDev editors are reading. We are also listing the most recent publications, blogs and events related to the ongoing crisis. If you have content to share in our weekly update, please submit here or contact us directly.

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Weekly summary

• Varying lockdown measures: As lockdowns threaten to upend economies, countries are weighing the costs and benefits of reopening. Some European nations are easing restrictions, while in other parts of the world, countries are trying different approaches. In Bogota, Colombia, authorities have used a controversial gender separation to prevent people from forming groups. Others, like Nicaragua haven’t imposed any restrictions. In Africa, Malawi became the latest nation to impose a lockdown while Senegal has imposed only a dusk-to-dawn curfew. India extended its lockdown until 3 May, but relaxed restrictions on farming, banking and public works. Tensions are rising in some countries. In Tunisia, those who lost their jobs demanded financial help and an end to the lockdown, and informal vendors rallied against coronavirus lockdown in Malawi.

• Rural livelihoods: Though rural livelihoods are at risk, according to an IFPRI analysis, agri-food sectors may be spared and even expand as food imports decline and domestic production rises. Job losses in urban areas may compel people to seek employment in agriculture; the downside of this will be lower rural incomes. To make matters worse for some, locust swarms in Uganda and Kenya pose an “alarming and unprecedented threat” to food security in the region. 

• Social protection measures: Cash transfer programs remain the most common policy intervention according to a portal maintained by World Bank senior economist Ugo Gentili. A webinar hosted by socialprotection.org proposes ways in which G2P Payments can be made in the COVID-19 Context.

• Migrants and refugees are some of the most vulnerable demographics. Due to insufficient funds, World Food Programme (WFP) has cut food rations for more than 1.4 million refugees in Uganda. As borders close everywhere, refugees and migrants make dangerous journeys to reach their home. At a normally small and quiet border crossing in Myanmar, more than 30,000 people came in a single day. With such movements come fears of spreading the virus.

• Managing pandemic misinformation is an ongoing challenge. An internet conspiracy claimed that 5G technology spreads coronavirus. This caused incidents in Britain where telecom towers were attacked. Cash has also suffered amid fears that coronavirus could be transmitted by handling cash. The risk of such infections remains low compared with other frequently touched objects, such as credit card terminals or PIN pads. Central banks have responded by urging acceptance of cash and sterilizing or quarantining banknotes at times.

Asia

• The Bangladesh Bank has asked authorities to declare mobile financial services an emergency service. The government has also extended financial support to businesses under the condition that they would pay employee salaries through bank accounts or mobile financial services. More than half of the workers at targeted companies don’t have bank accounts.

• In India, the two largest microfinance networks, Sa-dhan and Microfinance Institutions Network (MFIN), have urged the prime minister to extend the loan moratorium benefits to the MFI industry. LiveMint reports that the Reserve Bank of India (RBI) is exploring steps to aid struggling MFIs through a separate credit line. The central bank is closely examining the data received from MFIs.

• In the Philippines, Landbank launched a new lending program to help small and medium enterprises (SMEs), microfinance institutions (MFIs), and cooperatives. 

Sub-Saharan Africa

• The Central Bank of Kenya has barred unregulated digital lenders from providing information to credit reference bureaus, citing customer complaints. The Bank will also suspend for 6 months the listing of negative credit information for borrowers with non-performing loans since 1 April 2020.

• Regulators are encouraging the use of digital payments. The Bank of Central African States (BEAC) announced the interoperability of Mobile Money in the CEMAC region (Gabon, Cameroon, Central African Republic, Chad, Republic of the Congo and Equatorial Guinea). Transactions can be made directly between bank accounts, mobile money wallets and bank cards.

• In Togo, the government is using mobile money to implement universal solidarity income.

• In Côte d’Ivoire, awareness about use of digital payments as a tool to slow the spread of the virus is showing some results: 70 percent of electricity and water bills are paid by digital payments.

• In Kenya, some fintechs enable customers to pay for healthcare costs remotely.

• South Africa proposes a strict crypto regulatory framework. About 10.7 percent of South African internet users invest in bitcoin. Intergovernmental Fintech Working Group (IFWG), a group of South African financial sector regulators, has drafted a policy position paper on crypto assets to provide guidance for regulators.

• Digital finance and payment platform Sesacash partners with peer-to-peer cryptocurrency trading platform CryptoLocally to power crypto payments to Africa.

• Malawi commercial banks have suspended interest and principal payments for bank loans for the next three months. The banks have also reduced by 40 percent all fees and charges on internet banking mobile payments and other related services.

Latin American and the Caribbean 

• In Latin America and the Caribbean (LAC), 13 financial regulators, members of AFI, have implemented measures.

• Delivering stimulus packages to those in need is a challenge in LAC, particularly for women. According to Global Findex, 304 million women in the region still do not have access to a bank account. Only countries with advanced G2P payment ecosystems, such as Chile, can make such transactions.

• A FinEquityALC webinar highlighted concerns about small microfinance that focus on women’s financial needs given their limited access to funding sources. 

• The crisis is seen as an opportunity for governments and financial institutions to strengthen alliances with fintech to increase access through mobile wallets and/or simplified accounts.

Arab World

• The unprecedented dual shocks of the COVID-19 pandemic and the collapse in oil prices have exacerbated the MENA region’s already slow economic growth which was due in part to lack of data transparency.

• The Central Bank of Jordan set up a COVID-19 Response Challenge Fund to reform digital financial services and encourage use of mobile digital wallets (link in Arabic).

• The Arab Monetary Fund published a new study (in Arabic) that shows how Arab governments have responded with stimulus packages valued to about $180 billion.

• FMO supports Enda Tamweel with a loan valued at 60 million euros in support of women and youth from marginalized neighborhoods and borrowers from the agriculture and education sectors.

• Abdallah Ali, Microfinance Unit, Central Bank of Sudan, wrote a piece about how the country’s microfinance sector will be affected by the pandemic.

• The regional UNDP website for Arab States hosts a range of articles in English about the impact of COVID-19 on the various SDGs in Arab countries.

 For more, check out the latest Arabic FinDev Weekly Update.