FinDev COVID-19 Update | 20 May - 02 Jun 2021

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Global Update

• In a recent analysis, researchers at University of St. Gallen in Switzerland found that increased usage of contactless payment methods does not reduce the demand for cash. The analysis focused on bank account data of 30,000 customers of a Swiss retail bank, which showed that cards tend to be used for small-value transactions, making their impact on the overall payment volume insignificant.  
• According to the Bank of International Settlements (BIS), increasing digitization may lead to a “radical departure from the traditional model of monetary exchange.” New “Digital Currency Areas” may emerge, linking the currency to usage of a particular digital network rather than to a specific country. This has important implications for central bank independence, data ownership regulation and the treatment of private money. 

Asia

• In India, the second wave of COVID-19 infections has caused collection efficiency to go down starting in April, after improving steadily through March 2021. During the second week of May, recovery collection dropped to 65 percent. 
• The National Bank of Cambodia has extended debt relief measures, including loan restructuring and a reduced reserve requirement ratio, until the end of 2021.
• 10 million people in the Philippines have now registered their biometric information for the new national ID. The Philippines identification system has partnered with the Land Bank of the Philippines to be able to open bank accounts for registrants immediately after completing their biometric registration.
• Filipino mobile wallet GCash has almost doubled in users over the last year, reaching 40 million customers. The company recently launched several new financial services aimed at low-income users, including affordable medical insurance, a no-minimum-balance savings account, credit lines and an upcoming remittance service.
• South Korea has revised its Microfinance Support Act to require more types of financial institutions to contribute to a pool of microfinance funds for household lending managed by the Korea Inclusive Finance Agency.

Africa

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

• E-commerce is booming in Africa, driven by a high demand for online shopping due to the COVID-19 pandemic. According to a new IFC study, closing the gender gap in sales performance on e-commerce platforms could lead to nearly $15 billion added to the African market by 2030.  
• The pandemic has led to a 7 percent reduction in working hours in Sub-Saharan Africa in 2020, according to the latest report from the International Labour Organization. Women and young people are disproportionately affected.   
• West African startups raised $232 million in the first quarter of 2021, up from $62 million at the end of 2020, according to a report from Baobab Insight. $170 million of the total went to a single company, the Nigerian fintech Flutterwave, which provides payment solutions for businesses. Fintech was one of the most popular industries with investors in the region. 
• The Central Bank of Nigeria has announced the reopening of its loan facility for SMEs and households affected by COVID-19. The funds will be disbursed through NIRSAL Microfinance Bank.

For more on Africa, check out the latest Portail FinDev Biweekly Update in French.

Latin America and the Caribbean

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

• 2020 marked the first year in which Chileans used debit cards, instead of cash, as their preferred method of payment, according to the country's Central Bank.
• In Mexico, the pandemic has forced 1.3 million women out of the labor market and led to the closure of over 26,000 women-owned enterprises. Many women have left their paid jobs to care for young children and older adults at home.
• Peru announced a new strategy to promote digital payments which includes financial education programs, digital skills training for entrepreneurs and investments in telecommunications infrastructure to expand financial services. In 2020, financial institutions in the country launched 168 new digital products, including QR codes and digital wallets.
• The Colombian microfinance network, Asomicrofinanzas, reported a 2.9 percent growth in its member MFIs’ microcredit portfolios in the first quarter of 2021, the first notable increase since the beginning of the pandemic. However, the association predicts difficult times ahead for microenterprises due to new COVID-19 measures and political unrest in the country.
• While e-commerce is on the rise in Bolivia, 60 percent of consumers have never made payments online due to lack of mobile phones and mistrust in digital payment systems.

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

Arab World

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

• Government measures aimed at reducing unemployment rates in Oman have led to an increase in the number of new MSMEs in the country. 
• Two thirds of very small and medium-sized enterprises in Morocco reported a drop of more than 15 percent in revenue in the first half of 2020. This was followed by a loss of 430,000 jobs at the end of 2020, according to a recent study analyzing the pandemic's impact on the country.
• The UAE is planning to launch FinTech Megathon 2021, a fintech innovation program with the theme of “reimagining the future of inclusive financial services.” The initiative will feature workshops, training sessions and two hackathons, with the aim of promoting innovation and public-private collaboration.
• Saudi Arabia-based Tamara, a buy-now-pay-later company, raised $110 million in early-stage venture capital funding in April. Tamara has a network of over 1,000 merchants and aims to expand to every Gulf Cooperation Council market, capitalizing on the growing need for such services after more than a year of COVID-19.

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