A common international pledge to protect microfinance institutions and their clients during the COVID-19 sanitary crisis.
After several months of urgent sanitary measures being implemented worldwide, we can assert that the COVID-19 health crisis has transformed our societies and business models. As of today, it is very difficult to know the extent of the consequences of the crisis, but we can surely state that the crisis will hit the most vulnerable population first. Accordingly, the microfinance sector has been impacted by the crisis, and this requires finding solutions and taking the emerging opportunities out of this extraordinary time to overcome not only the health and economic effects but also to protect the most fragile populations.
In an effort to increase transparency and share best practices, a group of Microfinance Investment Vehicles (MIVs) and microfinance stakeholders have joined their efforts to draw a common guideline to respond to the crisis in a concerted and responsible manner.
Thus, 25 signatories joined the initiative of the Grameen Crédit Agricole Foundation and established a common pledge entitled “Key principles to protect microfinance institutions and their clients in the Covid-19 crisis”. The latter sets up a guideline for lenders and other stakeholders to better support microfinance institutions and fragile clienteles during the crisis.
This common pledge relies on the pooling of available information, analyses and anticipations, as well as the concerted implementation of shared decisions. Indeed, the signatories agreed on coordinating policies, technical assistance and resources to support microfinance institutions in facing the crisis. In this regard, the pledge aims to protect both the microfinance institutions and their clients and to ensure that the latter can have a continued access to funding in the best possible conditions, while looking out for clients’ and staff’s well-being.
The common pledge is neither a legally binding document nor a frozen document. It rather aims to share experiences in order to deliver better solutions and it can be adapted and improved when necessary as the situation evolves.
Finally, the signatories welcome additional stakeholders to join this common and engaged initiative. The coordination of efforts from private, public and solidarity players is key in the global assessment and support to the microfinance institutions’ actions. It is also essential to reinforce the impact of financial inclusion in the fight against poverty in this unprecedented time.