FinDev COVID-19 Update | 01 - 14 Jul 2021

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Global Update

• The coronavirus pandemic has shifted certain stakeholder priorities, placing a higher importance on strengthening client resilience and women’s empowerment, according to the new Financial Inclusion Compass 2021, which includes perceptions of 125 respondents working in 39 countries.

• CGAP, GOGLA and IFC Lighting Global have launched the PAYGo Performance, Reporting and Measurement (PERFORM) key performance indicators (KPIs). The KPIs will promote transparency and help PAYGo solar companies to benchmark and improve their performance. A consistent set of KPIs would also make it easier for investors, donors, and other stakeholders to structure targeted interventions if the industry needs support during a future crisis, like the one brought on by the COVID-19.

Asia

• In India, collections efficiency improved in June as the COVID-19 second wave receded and restrictions eased. However, the MFIs and NBFCs (non-banking financial companies) are having a harder time raising funds, as many have been downgraded by credit rating agencies, and smaller MFIs are struggling to survive.
• Many small microcredit lenders in Bangladesh have been forced to close due to the economic impact of the pandemic, while others are on the verge of shutting down. Lenders say that the government policy of extending a moratorium to individual borrowers but not to MFIs has exacerbated the crisis.

Africa

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

• Recent research by FSD Kenya highlights the need for reforming digital credit regulations to provide better consumer protection and transparency for users. Insights are based on four rounds of phone interviews with 200 households between March and December 2020. 
• The top four African fintech startups (also referred to as unicorns because of their $1 billion+ valuation) have recorded an increase in both number of users and transaction values since the onset of the pandemic as lockdowns and social distancing measures have pushed people towards fintech and e-commerce platforms. More companies are expected to reach the unicorn status in the region as the sector continues to attract funding. 
• Blockchain technology could add $29 billion to Nigeria’s GDP by 2030, according to a report by the development organization Enhancing Financial Innovation & Access (EFInA), which could help support post-pandemic recovery.

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.

• The COVID-19 pandemic has accelerated the demand for digital financial products, resulting in a growing fintech sector in Latin America, according to the research firm, Fidexable. Two countries in the region, Brazil and Uruguay, now rank among the top 20 global fintech ecosystems.
• Visa reported an increase in the use of the “Tap to Phone” solution in LAC, led by Peru with more than 25,000 small businesses using the tool which allows them to convert their cell phones into payment terminals.
• In Colombia, entrepreneurs are more likely to save in formal accounts if they have received financial education, use the internet to conduct transactions, are connected to the entrepreneurial ecosystem and have higher sales, according to a new study by Banca de las Oportunidades, a government program.
• ECLAC has revised upward its forecast for the region’s economy in 2021, predicting an increase of 5.2 percent, compared to the previous estimate of 3.7 percent, driven by the end of confinements and the increase in the prices of raw materials.

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.

• The European Bank for Reconstruction and Development (EBRD) launched a $120 million program for young entrepreneurs in Egypt. EBRD has also allocated $10 million to support small enterprises in Palestine.  
• The European Investment Bank renewed its support for the Jordanian economy with a $119 million credit line to Jordan Kuwait Bank targeting local SMEs severely impacted by COVID-19.
• Almost half of all SMEs in Kuwait will go bankrupt and are considering applying for liquidation due to their inability to continue coping with the impact of the COVID-19 pandemic.

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