COVID-19 FinDev Weekly Update | 28 May - 3 June 2020

FinDev Gateway has created this COVID-19 weekly update with the latest and most relevant knowledge resources for financial inclusion as they become available. Sign up to receive FinDev's weekly update each Friday with a summary of the main issues covered during the week. 

If you have content to share in our weekly update, please submit here or contact us directly.                                                                                                                  

Weekly Summary

• The Microfinance Coalition calls on policymakers and donors to support microfinance institutions during the COVID-19 pandemic. The Coalition says that donors and policymakers can rely on MFIs to help reach excluded people.
• A series of blog posts on covid-finclusion.org discuss the various ongoing efforts to support the microfinance sector. One post suggests that emergence of multiple initiatives in response to COVID-19 is making collective efforts less effective; the author highlights the need for a central coordinating body. In other blog posts, authors argue that it’s not too early to plan for insolvency and recapitalization of MFIs and other similar organizations; and DFIs can do more to support the sector by responding to liquidity needs, offering guarantees and possibly debt forgiveness.
• The Alliance for Financial Inclusion has developed a policy framework to help regulators leverage digital financial services during global emergencies.
• UNDP says that the coronavirus pandemic has caused human development index to decline, erasing the progress made in the past six years; some aspects of human development have been set back to levels seen in mid-1980s.
• The pandemic has disproportionate effects on young people, interrupting their education and training and hurting their employment prospects. According to a new ILO global survey, the pandemic has left one in six young people unemployed with women being affected more.

Asia

• Online lenders across Asia are facing an existential crisis as borrowers default on their loans, leading them to lay off staff, cut costs and in some cases close operations in certain countries.
• In Southeast Asia, unemployment is reaching unprecedented levels. Thailand is expected to be the hardest hit due to the economy’s dependence on the tourism industry. 
• In South Korea, the average lending rate for local banks hit an all-time low, declining for the fourth consecutive month. At the same time, government support has been hailed as an example of efficiency for other countries, as relief payments were disbursed to 97 percent of all households in about two weeks.

Africa

Some articles and knowledge resources referenced in this section are in French. 

• In Rwanda, motorcyclist taxi drivers will soon be required to use cashless payment to limit the spread of the virus. Airtel Rwanda is providing a digital payments platform where customers will be able to pay with their mobile phones.
• In Cameroon, the telecom and mobile money operator MTN has suspended fees on transfers between mobile money and bank accounts.
• Community-driven development (CDD) programs, which gather community groups, civil society, governments and the private sector, could be a quick and inclusive way to deliver cash and basic services to informal workers.

Latin America and the Caribbean

Most articles and knowledge resources referenced in this section are in Spanish.

• In Argentina, four major commercial banks launched Play Digital, a joint platform that will provide digital payment services to more than 10 million customers.
• The Mexican Central Bank (Banxico) says that an increasing number of companies from various sectors are interested in adopting the digital payment platform CoDi.
• The microfinance sector in Peru opposes a law that seeks to regulate interest rates and postpone client repayments up to a year.
• In Bolivia, microfinance institutions are demanding faster disbursement of the promised government loan to help micro, small and medium-sized companies.
• A new interactive platform in Mexico, Federalismo en COVID, tracks policies related to COVID-19 by state.

For more on LAC, check out the latest Portal FinDev Weekly Update in Spanish.

Arab World

• Only $1.35 billion was pledged in emergency aid for Yemen over the coming six months, $1 billion less than what the UN says is needed to address the humanitarian crisis.
• The proportion of Palestinian households living in poverty is expected to reach 30 percent in West Bank, up from 15 percent before the coronavirus pandemic, and 64 percent in Gaza, up from 53 percent. According to the World Bank, digital infrastructure improvements could help create new high-end jobs, especially among youth.
• Tunisia will benefit from a $59 million loan from the Arab Monetary Fund as part of a regional loan facility for the Fund’s member countries to address the impacts of COVID-19.

For more on the Arab world and resources in Arabic, check out the latest FinDev Weekly Update in Arabic.