Microfinance institutions’ responsible approach to the effects of Covid-19

By Grameen Credit Agricole Foundation

Last April, Africa’s Pulse, an analysis published by the World Bank Group, estimated that economic growth in sub-Saharan Africa would fall from +2.4% to a level between -2.1% and -5.1%, which would constitute the first recession in the region in 25 years. This recession is expected to hit countries dependent on mining and oil exports, while countries without natural resources are expected to post slower but positive growth.

In permanent contact with its network of 80 partner microfinance institutions (MFIs) and social enterprises in 40 countries, the Grameen Crédit Agricole Foundation is continuing its work of collecting information, analysing and sharing its observations. The privileged testimonials of our partners enable us to continue our monitoring of the crisis and its consequences. In this last questionnaire we focused on two particular aspects: the operational adaptations of MFIs and the role of loan officers during this crisis.

In summary

The economic crisis has become a reality for the vast majority of microfinance institutions supported by the Grameen Crédit Agricole Foundation. Almost all of them have implemented massive maturity extension programmes to facilitate the economic recovery of their borrowers.

The loan officers of these institutions are the privileged point of contact between clients and microfinance institutions. They spend almost half of their working time studying requests for loan maturity extensions and implementing such extensions.

The institutions were quick to adopt programmes intended to reduce their costs while ensuring the social protection of their employees and safeguarding jobs. Only 12% of them have resorted to economic redundancies, which is relatively low compared to national averages. On the other hand, the institutions are postponing their recruitment programmes as well as a large part of their investments. They also seem to be seeking to direct their funding towards sectors that are now considered less risky. This is particularly the case in agriculture, in what is a recent phenomenon.

It remains to be confirmed and will be followed up closely in our next news items.By looking proactively for bulwarks against the crisis and by adopting responsible approaches, MFIs are on the right track: today’s innovative solutions can be tomorrow’s successes as well.

Institutions are henceforth focusing on risk management

Whereas the health crisis seems to be slowing down in the countries that have adopted the most effective measures, the plans for exiting from the lockdown point to a very gradual recovery in economic activity. Our latest results confirm what we have been observing for several weeks: a  remarkable adaptability on the part of microfinance institutions in the face of an unprecedented crisis.

Nearly 90% of the institutions have set up a crisis committee, chaired by the Chief Executive Officer and bringing together the management committee, to steer the various decisions and deal with the effects of the crisis. This committee usually meets every week.

“[We created] a “Crisis Management Team” composed of the Executive Committee members and supported by the Chairperson of the Board whenever required. [We have] weekly meeting with the Board of Directors to update on the situation and validate the main decisions”– Partner in Myanmar

The effects of the crisis are now being felt by 81% of the partners surveyed, who report an increase in risks to their customer portfolio. The efforts of microfinance institutions are now focused mainly on responding to this challenge, to the detriment of other activities that are currently considered less essential (nearly one out of two were providing this type of service at the beginning of April, compared to one in three today). Intended to provide non-financial services (awareness and information campaigns, provision of equipment, etc.) this reduction in activity has fuelled strong growth in activities dedicated to credit restructuring.

“To support our clients during the coming months, proposition of suspension of principal and interests instalments to all customers that were not in PAR as of March 1st. To date, 75% of the customers called have accepted. The process will continue.” – Partner in Ivory Coast

Institutions are adapting on the financial and economic activity fronts

The table below shows the progression of the difficulties encountered and the mitigation measures implemented to address them.

On the financial front

Against this background, the volatility of currencies is weighing heavily on the treasuries of institutions: 64% of respondents outside the CFA Franc zone are thus faced with a strong devaluation of their local currency against the dollar. This devaluation has a direct impact on institutions that have taken on debt in that currency since the vast majority of them receive microcredit interest in local currency.

“The situation is becoming even worse with significant KGS devaluation over the last months, contributing to increase the hedging cost” – Partner in Kirgizstan

The information provided by our partners in this survey also confirms the quasi-mandatory measures taken by MFIs during the crisis: 67% of the MFIs surveyed have reduced or stopped microcredit disbursements. In the same proportion, institutions have started to restructure loans to small borrowers on a massive scale by granting maturity extensions of 3 months on average. These moratorium periods constitute a truly essential element of crisis management at all levels. Whether mandated by local regulators or proposed spontaneously by the MFIs, they enable borrowers to benefit from a reduction in charges before resuming their activities. Similarly, the many processes of maturity extensions for investors enable the MFIs to retain valuable liquidity in a period of uncertainty. The Grameen Crédit Agricole Foundation consequently granted numerous maturity extensions in April, in full and effective consultation with other lenders.

For all that, the crisis has not affected MFIs’ proactivity, but is encouraging them to adapt. To do so, some are looking for more resilient sectors in the current economic crisis. For example, we have noted that 40% of institutions are considering turning to the agricultural sector — a sector that has been rather neglected because it was considered riskier before the crisis. This point will be followed up in particular in the next questionnaires as this percentage seems to us to mark a notable change in attitude. This new direction is being considered by more than half of the MFIs whose agricultural loans do not exceed one third of their portfolio, but also by very rural and agricultural MFIs. It is still too early to say, but the current crisis could encourage institutions to discover traditionally neglected sectors.

“[We] move ahead with plans on Rural & Agriculture Finance” – Partner in Sierra Leone

On the economic activity front

As to economic activity, the difficulties in moving teams around are diminishing somewhat: 55% had difficulties in May, compared with nearly 80% in April. Conversely, group meetings are still banned, and such prohibitions are on the increase, which penalizes the relationship processes of the institutions, especially with clients who have no alternative to solidarity loans.

“Group meeting was weekly or bi-weekly for repayments and social network. Without group meeting you cannot enforce the repayment any more”. – Partner in Kenya

In social terms, only 12% of those surveyed have had to part with employees since the beginning of the crisis, which is quite low, however, compared to the national average growth in unemployment figures. Our partners seem to follow the first principle set up by SPTF (1)  “Keep staff employed” according to which “today’s employees will be tomorrow’s assets”. For a large number of our partners, parting with employees in critical times seems to be more of a loss than a slight short-term economic gain. On the other hand, expectations are already weighing on the growth and development projects of our partners since almost one institution in two has put these ongoing recruitment projects on hold. This uncertainty weighs also on organisational projects, with 41% of the MFIs surveyed having decided to postpone this type of internal project.

The protection of staff is always a point of vigilance with 90% of the MFIs that continue to provide them with significant resources and remind them of barrier gestures. Since the beginning of the crisis, our partners have taken quick decisions to reduce the weight of their fixed costs and limit the risk of exposure to the health crisis: mandatory paid holidays (52%), teleworking (62%), team rotation, reduced working hours (57%) and reduced branch opening hours (52%). The level of progress in internal digitization in some institutions has favoured these organizational changes. This is particularly the case for our partners in Europe and Central Asia, who benefit from numerous electronic and online tools.

“Most of us from the head office have been working distantly, thanks to our proper remote IT system which enables all the departments continue smooth working.” – Partner in Georgia

The current crisis, which, as we have seen, limits the “business as usual” capacities of MFIs, has led us to explore how to adapt the job of loan officer, which is at the heart of the microfinance business. Certain tasks remain the same, particularly for MFIs in the least affected countries: loan disbursement (43%), repayment monitoring (38%) or client file analysis (43%).

The restructuring of loans in progress is taking an increasingly important place in the daily life of loan officers (43%), with the encouragement to use mobile payments (36%) and the drafting of amendments relating to maturity extensions (31%).

Just as in the retail banking sector, where the client officer has clearly demonstrated its importance in times of crisis, the loan officers of microfinance institutions are the privileged link for clients. 81% of respondents say that the key role of loan officers is to maintain contact with clients and/or credit group leaders.

“[We] maintain contact with all individual clients, group leaders and Village Bank Presidents through digital and phone channels.” – Partner in Zambia

“Strengthening client interaction by (smart) phone or other digital devices and collecting through group leader where possible.” – International MFI network

This essential and massive approach is to be favoured all the more as it is recognized by the Social Performance Task Force (SPTF) in its crisis management principles as being essential in times of client fragility. It is also worth noting that 33% of the MFIs have initiated surveys of their clients to gain a better understanding of their needs and propose adapted offers and services. For nearly half of the MFIs (43%), the advisors also play the role of “health advisor” by reminding them of good hygiene measures, which is the case in West Africa and Europe in particular.

”One of the best investments you can make right now is to maintain close contact with your customers. Many can’t make payments, but they are valuable assets just the same.” – SPTF


(1) STPF is a non-profit association that engages with stakeholders from the inclusive finance sector to develop and promote standards and good practices in social performance management.

Crédit Agricole and Dai-ichi Life partner to support microfinance and gender finance

©Philippe Lissac

May 14, 2020. Of the 1.7 billion adults worldwide who are unbanked, women are overrepresented: about 980 million do not have an account, 56% of the world’s unbanked (World Bank). That is the target population of the microfinance sector, which provides a set of financial products and services to people excluded from the banking system.

To support the development of microfinance and gender finance, the Dai-ichi Life Insurance Company Limited, Crédit Agricole CIB, Tokyo Branch, and the Grameen Crédit Agricole Foundation have set up an innovative scheme. The Dai-ichi Life Insurance Company has invested 2 billion Yen in a 10-year Microfinance and Gender Loan scheme by Crédit Agricole CIB, which will benefit the Grameen Crédit Agricole Foundation to support microfinance institutions focusing in women and social enterprises in rural economies of developing countries.

This is the first ever Microfinance and Gender Loan scheme arranged by the Crédit Agricole Group. “This one of a kind transaction is a perfect illustration of the ambitions of the Group’s Project 2022. It reaffirms our customer-focused model and our efforts to provide innovative solutions to our Asian clients, while strengthening our commitment to responsible investment”, says Michel Roy, Senior Regional Officer for Asia-Pacific of Crédit Agricole CIB.

With this partnership, Dai-ichi Life Insurance Company reinforces its commitment to high social impact investments. “We are honored to financially support the Grameen Crédit Agricole Foundation and its action in favour of women financial inclusion and entrepreneurship in developing countries. As a responsible institutional investor, Dai-ichi Life will continue an active engagement in ESG investment and contribute to forming sustainable social framework around the world”, affirms Tetsuya Kikuta, Director, Managing Executive Officer of the company.

For the Foundation, it is a great opportunity to strengthen its action in developing countries. Alongside Crédit Agricole CIB and Dai-ichi Life, we will step up our support for women empowerment through microfinance and female entrepreneurship. It is a real pride for the Foundation to be part of this innovative and unique partnership in the history of the Crédit Agricole Group”, says Eric Campos, CEO of the Grameen Crédit Agricole Foundation.

An international coalition to protect microfinance institutions and their clients in the Covid-19 crisis

By the Grameen Credit Agricole Foundation

©Philippe Lissac

At the initiative of Grameen Crédit Agricole Foundation, a group of microfinance lenders and key players in inclusive finance worked on a set of principles to better support the microfinance sector in the health and economic crisis caused by the Covid-19. Grameen Crédit Agricole Foundation, ADA, Alterfin, Cerise, CIDR Pamiga, Cordaid Investment Management, Crédit Agricole CIB India, CA Indosuez Wealth (Asset Management), Crédit Agricole S.A., European Microfinance Network, FS Impact Finance, InFiNe.lu, Inpulse, Luxembourg Microfinance And Development Fund, MCE Social Capital, Microfinance Centre, Rabo Foundation, SIDISIMA and Social Performance Task Force are the first signatories of a common pledge that aims to support microfinance institutions and fragile clienteles during this crisis.

Worldwide, microfinance institutions provide financial and non-financial products and services to over 140 million low-income clients [1]. Microfinance is key to finance income-generating activities, not only in the formal but also in the informal sector. In the Covid-19 crisis, both micro-enterprises in the informal economy and small businesses overall form an essential basis for social and economic recovery.  Supporting microfinance institutions in this context is therefore of vital importance to protect the most vulnerable borrowers.

In response, this group took on the challenge and established a common pledge:  “Key principles to protect microfinance institutions and their clients in the Covid-19 crisis”. It aims to guide lenders and other stakeholders to better support microfinance institutions and fragile clienteles during this crisis. It is inspired by best practices and tools of the microfinance sector, such as the work done by the Social Performance Task Force [2] and the IAMFI Microfinance Voluntary Debt Workout Principles [3].

In this pledge, the pooling of available information, analyses and anticipations, as well as the concerted implementation of shared decisions are the fundamental principles. The signatories agree to coordinate policies, technical assistance and resources to help microfinance institutions face the crisis. The objective is to protect both the microfinance institutions and their clients to ensure the continued access to funding in the best possible conditions and to look out for clients’ and staff well-being.

As individual obligations and mandates may influence the way the provisions of the pledge are implemented, it is not intended as a legally binding agreement. This is not a frozen document; it could be improved if necessary to better respond to the evolution of the crisis. The pledge’s signatories will maintain open communication with their peers, to share their decisions and to comply with these principles.

The signatories welcome additional stakeholders to join this common and engaged initiative. The involvement of private, public and solidarity players is key in the global assessment and support to the microfinance institutions’ actions. It is essential to reinforce the impact of financial inclusion to fight poverty in this unprecedented context.

Download the pledge


[1] Microfinance Barometer 2019
[2] //sptf.info/resources/covid19
[3] Charting the Course: Best Practices and Tools for Voluntary Debt Restructurings in Microfinance, IAMFI, Morgan Stanley, 2011. The document is available on Findev Gateway

[Interview] CA Centre-est reinforces its support to the Solidarity Cents operation

Interview with Aurélie Bellemin, Director, Fondation Solidarités by CA Centre-est


The Solidarity Cents operation is taking off within the Crédit Agricole Group. After a successful inaugural edition in 2018 on the Montrouge and Saint-Quentin campuses, the new edition was held from 18 to 22 November 2019. Organized by the Grameen Crédit Agricole Foundation, Crédit Agricole SA and Crédit Agricole Centre-Est, the operation has changed scale and has been extended to the three company canteens of the Crédit Agricole Centre-Est: Lyon-Champagne-au-Mont-d’Or, Bourg-en-Bresse and Mâcon.

With more than €8,600 collected at all the sites, the funds will finance the ICI d’Entrepreneurs du Monde [Incubation – Creation – Inclusion project of Entrepreneurs of the World] which guides and supports entrepreneurship projects carried out by refugees, single parents and homeless people.

— What is the Solidarity Cents operation?

Aurélie Bellemin, General Manager: It is a great collective adventure at Crédit Agricole to finance projects with a social impact. Employees at 5 sites of the Group can, if they wish, make a donation of 50 cents (or more!) when they pay for their meals at the canteens. The warm welcome extended to the initiative in 2018 in Montrouge and Saint-Quentin encouraged Crédit Agricole Centre-Est to join the operation and organize it on our three sites in 2019.

— How would you sum up this edition?

The generosity of our employees, our service provider and the Regional Bank enabled us to collect €1360, supplemented by additional financing from the regional bank. Solidarity Cents is an action that disseminates the Crédit Agricole’s mutual assistance spirit. Employees participate and feel concerned about the concrete effects of the operation.

— What exactly are the funds collected used for?

For the second year, we are donating the funds collected by the NGO Entrepreneurs du Monde to finance its project Incubation, Creation, Inclusion (ICI) – a programme aimed at helping vulnerable people get integrated through the creation of micro-enterprises. The beneficiaries are trained and supported by volunteers and experts to give concrete form to professional projects, with an emphasis on digitization on the one hand and sustainable catering on the other. Some forty training schemes have already been financed thanks to the donations made in 2018.

— Do you have examples of beneficiaries?

Yes, when the operation was launched in November, Crédit Agricole employees from Montrouge and Lyon met Rania, supported by Solidarity Cents, who came to present the entrepreneurial project she has created. Rania is a Syrian refugee who has managed to launch her catering business based on Syrian specialities, thanks to guidance and support from the Entrepreneurs du Monde. This type of meeting helps to change the way we look at refugees and to understand that there are inspiring human destinies that transcend preconceived notions.


Source: Integrated Report 2019, Grameen Crédit Agricole Foundation. Dowload it here

Click to view the Solidarity Cents video

[Interview] Palmis Enèji: For clean and accessible energy in Haiti

Interview with Jean-Farreau Guerrier, Coordinator, Entrepreneurs du Monde Haiti

©Nicolas David

– Tell us about Palmis Enèji. How is this social enterprise adapted in Haiti?

Jean-Farreau Guerrier, coordinator: Palmis Enèji is a Haitian social enterprise that specializes in the distribution and maintenance of clean cooking and lighting equipment for the most disadvantaged households in Haiti. The situation is critical in our country, so action is needed. Already one of the poorest countries on the planet, Haiti is going through a crisis that is severely affecting its population. Street demonstrations are frequent, the security situation is deteriorating, and some areas are completely inaccessible. Hit by an inflation rate of nearly 20%, households are losing purchasing power, 62% of them remain without access to electricity and up to 85% are in rural areas. As a result, families use candles or kerosene for lighting and charcoal for cooking. With its stoves and solar lamps, Palmis Enèji offers solutions to replace these rudimentary methods.

–What are the socio-economic impacts of your actions?

Thanks to partnerships with microfinance institutions, Palmis Enèji provides financing solutions that facilitate the acquisition of equipment. Many households and professionals are thus switching to cooking using LPG, which is far less harmful than charcoal cooking. The poorest families in rural areas have practically no access to LPG, so they use our improved charcoal stoves, which consume 20% to 30% less than traditional stoves. Our solar lamps also provide them with lighting, which is healthier and more comfortable than candles. These solutions enable the poorest families to save money while reducing their ecological footprint: we estimate that we have helped save over 153,000 tonnes of forest timber and reduced harmful CO2 emissions by more than 203,000 tonnes. Finally, Palmis Enèji supports economic activity with a network of franchised micro-businesses. As one of our resellers aptly summarized the social utility: “I am proud to see light shining in our families.”

– What upcoming developments do you foresee?

We are pursuing the strong objective of making devices, which are beneficial to health and to the environment, accessible to everyone in every village. To that end, we are prioritizing three projects:  access to LPG through distribution centres in the centre of the country and in the Grande-Anse department; the development of the after-sales service and diversification of our product range; and the expansion of our partner network.


Source: Integrated Report 2019, Grameen Crédit Agricole Foundation. Download it here

[Interview] CA Val de France supports a Solidarity bankers mission in Cambodia

Interview with Laurence Lebrun-Renoult, General Manager, CA Val de France

©Philippe Lissac

Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA, Banquiers solidaires [Solidarity Bankers] is a skills volunteer programme that offers Group employees technical assistance assignments with organizations supported by the Foundation. In 2019, the Caisse Régionale Val de France supported a Solidarity Banker assignment in Cambodia. Dominique Rombczyk, a risk analyst with the Regional Bank went to Cambodia on a 10-day “financial management” assignment in September for Cirque Phare (PPSE), a social business in which the Foundation is a shareholder.

– What motivated your Bank to take part in the Solidarity Bankers programme?

When one of our employees took the initiative to apply for a Solidarity Banker assignment, our Bank naturally supported his request and granted him a week of skill-based sponsorship. Dominique Rombczyk was thus able to bring his skills to bear in the financial management of the Cirque Phare (PPSE). PPSE is a Cambodian social business which promotes the social integration and empowerment of young people through the arts and culture. It is a source of pride for us, because this approach is fully in line with our guidance and support values.

– What feedback do you get from this experience?

Solidarity Bankers is one of those programmes that make us more sensitive to the social consequences of our banking activities. It is making a difference for a sustainable vision of finance in both theory and practice. The initiative carried out by our employee enabled us to share and disseminate in our Bank the human qualities of openness and commitment which we promote. In addition to communication at Group level, his experience made headlines in internal communications, for instance. Fur us bankers, knowing how to mobilize our skills in the service of others, opening up and adapting to a different context and to different issues are soft skills that must be part and parcel of our line of business.

– What other actions does your Regional Bank take to promote social inclusion?

Social cohesion in regions is a strategic priority for a Regional Bank such as ours. The Crédit Agricole Foundation – Val De France is pursuing initiatives in favour of local or regional associations endeavouring for the inclusion of young people on the one hand and for intergenerational support on the other. We provide skills-based sponsorship for these associations on a voluntary basis, following the same model as the Solidarity Banker assignments. For example, we are launching a youth training project for which all the expertise of our staff is welcome for support assignments: assistance for financial management, leadership, advice, etc. We also work with young people to support isolated, often elderly persons, which fosters the inter-generational dialogue. This effort as a whole is part of a broader approach aimed at promoting the socio-economic autonomy of populations.

Source: Integrated Report 2019, Grameen Crédit Agricole Foundation. Dowload it here

[Interview] “With the FIR, CA Centre-France opens-up to microfinance”

Interview with Jean-Christophe Kiren, CEO, CA Centre-France

©Didier Gentilhomme

Reserved for the Regional Banks and the entities of the Crédit Agricole Group, the Fund for Inclusive Finance in Rural Areas (FIR), supported by the Grameen Crédit Agricole Fund, is used to invest in microfinance in emerging countries. Crédit Agricole Centre France subscribes thereto for an investment of €700,000 and reinforces its mission as a bank that promotes economic inclusion.

– What is your Bank’s approach to investing in the Fund for Inclusive Finance in Rural Areas?

The new fund open to the Regional Banks is fully in line with our mutual assistance and cooperative action. First of all, its general mission, i.e. to promote economic and social inclusion in rural areas, already requires our undivided attention at Crédit Agricole Centre France, given the specific rural features of our regions in Auvergne and Limousin. Secondly, I was particularly touched by the issue of the financial empowerment of women, which the FIR is intent on strengthening. Finally, this cooperation is an opportunity for the Regional Bank to open up to microfinance by drawing on the expertise of the Grameen Crédit Agricole Foundation and to develop new tools to serve the territories.

– Which actions on financial inclusion and entrepreneurship with an impact does the Regional Bank pursue in the region?

The entire Regional Bank – elected representatives and salaried employees – is committed to and takes part in actions with a social impact. It carries out many operations ranging from initiatives led by the  Crédit Agricole Foundation – Centre France to equity investments in social enterprises. In this respect, the Regional Bank has a broad banking organization to support projects with a strong social impact. Furthermore, I would like to see the Regional Bank endowed with a €2 million fund by the end of 2019 to support projects that promote inclusion. There are plans to have some of the financed projects identified directly by employees so as to involve the teams.

– How do you see these new inclusive and responsible approaches?

We are bankers… but not just bankers. We are also men and women committed to the life in the regions, driven by the cooperative and mutual assistance values of Crédit Agricole. The investment of Crédit Agricole Centre France in the FIR supported by the Grameen Crédit Agricole Foundation is fully in line with this spirit. Mutual aid, sharing, and solidarity are commitments for the benefit of all.


Source: Integrated Report 2019, Grameen Crédit Agricole Foundation. Dowload it here