Oxus Kyrgyzstan, a beneficiary of the Solidarity Bankers programme

Solidarity Bankers is a skills volunteering programme launched by the Foundation and Crédit Agricole S.A. in 2018. The programme has a twofold objective: on the one hand, support microfinance institutions and social impact enterprises financed by the Foundation with technical assistance, and on the other hand, enhance the skills of Group employees who want to invest themselves in projects with high social impact.

OXUS Kyrgyzstan is a microfinance institution, which aims at providing financial services to the working poor and under-banked in Kyrgyzstan. Andreas Brunner, Supervisor Internal Audit at Crédit Agricole Assurances, accompanied the institution in the definition of an annual marketing plan.

Feedback on the programme with Denis Khomyakov, CEO of OXUS Kyrgyzstan.  

  • Presentation: Can you present your microfinance institution? Key figures, mission and approach, clients, structure…

The company was created in 2006 by OXUS Group and ACTED (main shareholder). The mission of our institution is to be a transparent and responsible enterprise committed to providing financial services to the working poor and the under-banked in Kyrgyzstan. The company is located in 5 out of 7 regions in Kyrgyzstan, has 15 branches and 135 employees. Nowadays we have around 9 500 clients, with outstanding loan portfolio of 800 million KGS (USD 9.4 million). 50% of OXUS clients are women and 63% of their clients are coming from rural areas.

  • You benefited from a Solidarity Banker mission in 2021 to structure an annual marketing plan and a loyalty programme. Why was this important for your institution?

A properly designed and well-functioning loyalty programme will increase the retention rate of clients, while attracting new ones. The marketing plan should allow the company to structure the resources allocated to marketing activities in a more efficient way. Those two deliverables of the Solidarity Banker mission will allow us to better value the offer of OXUS Kyrgyzstan.

  • How did you prepare the mission before the Solidarity Banker came?

We spent a lot of time on selecting the priorities that we wanted to cover with the Solidarity Banker. We prepared the full documentation about the company, its clients, its activities, the current run of the business and a list of the people involved in future projects. We organised several calls with Andreas to discuss what we wanted to do in terms of marketing and how to do it. The preparation phase was capital for the success of the mission.

  • What did you expect from the Solidarity Banker? Do the results match your expectations?

I actually expected a consultancy with some documents as deliverables. What we received: a detailed training from a marketing specialist! Andreas, the Solidarity Banker, conducted interviews and trained all the people involved in the marketing process, from loan officers and branch managers to the CFO and COO. The result is fantastic and we use now the documents created with Andreas. Those documents are 100% adapted to our reality. The mission was excellent and beyond all expectations.

  • What were the priorities defined following the recommendations made?

The priority is to fine-tune the marketing plan for 2022 and implement it. The loyalty programme is also a work in progress, but presupposes the implementation of the 2022 marketing plan. We are looking forward to implementing both projects.




Field mission of the Foundation’s Administrators in Bosnia

From the 23rd to the 27th November, the administrators of the Grameen Crédit Agricole Foundation participated in a field mission in Bosnia during which they met the supported microfinance institutions and their clients. Operating in Bosnia since 2018, the Foundation has funded three partners working mainly in rural areas and that have a high percentage of women among their clients: Partner, Mi Bospo and Mikra.

During the mission, the Foundation’s administrators were able to discuss with partner institutions and learn more about the microfinance sector in Bosnia, a country still scarred by the 1992-1995 war. They also met the clients of these institutions that thanks to the microcredits obtained, develop income-generating activities and can improve their living conditions. These discussions highlighted the important place that microfinance has in the development of microentrepreneurship in Bosnia.

In addition to meeting with the Foundation’s partners, this field mission in Bosnia was also an opportunity for the administrators to discuss the Foundation’s positioning and the thematic axes of the 2022-2025 strategic plan. This reflection will continue over the coming months with the Foundation’s teams and other stakeholders.

Discover the video testimonials of Raphaël Appert, Chairman of the Grameen Crédit Agricole Foundation and Vice-Chairman of Crédit Agricole SA, and Bernard Lepot, Chairman of the Foundation’s Investment Committee, on this field mission.

The Foundation is committed to small agricultural enterprises

© Godong

The Council on Smallholder Agricultural Finance (CSAF) is the leading global network of lending practitioners promoting an inclusive financial market for producer organizations and small- and medium-enterprises (SMEs) in the agriculture sector. Since 2013, CSAF’s 16 members and affiliates have provided $5B in lending to agricultural SMEs providing market access for 3.4M smallholder farmers across 65 countries in Africa, Asia, and Latin America.

After becoming a CSAF affiliate in June 2020, the Grameen Crédit Agricole Foundation pursues its commitment in 2021 by participating in the construction of a Memorandum of Understanding (MoU) in order to provide clearer principles and protocols for loan restructuring and workouts.

The need for a MOU  

Increased co-operation by CSAF members has generated positive collaboration between lenders, resulting in additional funds and technical assistance for the borrowers. In some cases, however, there has been a lack of coordination with sub-optimal outcomes for lenders and borrowers alike. The Covid-19 crisis has increased the need for clearer principles for loan restructuring and workouts.

Collective work

CSAF members organized several Workshops in March 2021 in order to focus and develop explicit expectations for loan workouts. Following these Workshops, a Workouts Working Group (WWG) has been established to develop basic principles, outlined in the MoU, that members can follow during loan restructurings and workouts. The Grameen Crédit Agricole Foundation has been a contributor to this reflection and the “Key principles to protect microfinance institutions and their clients in the Covid-19 crisis” Pledge has been a useful resource.


Download the MoU here.


Notebook of a Solidarity Banker in Kyrgyzstan

Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA in June 2018, Solidarity Bankers is a skills volunteering programme aimed at all Crédit Agricole group employees for the benefit of microfinance institutions or impact enterprises supported by the Grameen Crédit Agricole Foundation. Andreas Brunner, Solidarity Banker of Crédit Agricole Assurances, carried out a field mission in favour of Oxus Kyrgyzstan in October 2021.

Testimony of Andreas Brunner, Supervisor Internal Audit, Crédit Agricole Assurances

A social commitment in favor of financial inclusion

From my beginnings at Crédit Agricole (14 years ago!), I have been sensitive to the solidarity actions offered by the group. I first discovered the Solidarity Bankers program when a colleague shared the call for applications for a mission in marketing. He once carried out a Solidarity Bankers mission in Africa and his feedback motivated me. I therefore applied in October 2019 for this marketing mission in favor of OXUS, a microfinance institution in Kyrgyzstan. After several interviews, I got selected for the mission. It fully met my expectations: to put my skills at the service of a solidarity project and discover a new culture and activity. My mission was initially scheduled for March 2020 and we believed in it … until the lockdown. Then another attempt in April 2021 which again resulted in a postponement. Finally, I left in October 2021.

Preparation of the mission

My mission in favor of OXUS Kyrgyzstan had two main components: the definition of an annual marketing plan and the creation of a loyalty program to increase the retention rate of their customers. Several interviews with the teams of the Grameen Crédit Agricole Foundation and OXUS allowed me to better assess and understand the challenges and objectives of the mission. In order to prepare my visit in the field, I analyzed documents about the institution’s strategy and the microfinance market in Kyrgyzstan before departure. I also had a long discussion with an employee of the main shareholder of OXUS, the NGO ACTED. Once my schedule was defined, nothing left but to go!

In the footsteps of the Silk Road

I have to admit: I didn’t know much about this beautiful Central Asian country, not even its capital. In addition to the documentation I read before my departure, the long flight was a good opportunity to review the geography and learn more about the history of the country.

Arrival in Istanbul, the airport reminds me of the crowds before the Covid-19 crisis and I feel like I am on the Silk Road. After a second 5 hour flight, I finally arrive in Bishkek (IATA code: FRU, for connoisseurs) where I am welcomed by the Managing Director himself! First stone of our friendship.

Two weeks of intense work followed: interviews, agency visits, analyzes … Time flies by but I can count on the availability of my interlocutors. The exchanges are done mainly in English, but I am happy to be able to exchange a few words in Russian, which helps me not only during interviews but also at the restaurant. I spent the second week of the mission finalizing my deliverables (strategic and tactical analyzes, annual plan, loyalty program and practical tools for teams) and testing my proposals. It was also an opportunity to discuss with the OXUS teams on the work they will have to carry out in the coming months. Thanks to the support of the CEO and the Board of Directors, I am leaving confident that they will be able, on the one hand, to carry out a large number of actions planned in the 2022 marketing plan, and on the other hand, to implement their new loyalty program.

An unprecedented human experience

Above all, I remember a warm welcome and meeting great people. The Kyrgyz people taught me a lot to their culture and showed great hospitality. I was able to discover the capital with its history, its architecture, its Russian heritage. An excursion organized over the weekend allowed me to get to know this country better with its yurts, its cuisine, its agriculture, its petroglyphs, its huge salt lake at an altitude of 1600m, and above all, its high mountains towering at more than 7000m and surrounding the city.


I would like to thank the CEO of OXUS Kyrgyzstan, Denis Khomyakov, for his generosity and his trust, the entire team of the Grameen Crédit Agricole Foundation for the support (Carolina Viguet, Cécile Delhomme, Julie Serret, Philippe Guichandut), Aurélie Cacciotti of Crédit Agricole SA for the logistics as well as all the people of Crédit Agricole Assurances who have contributed to make this mission possible.


[INTERVIEW] Humo, a beneficiary of the Solidarity Bankers programme


Solidarity Bankers is a skills volunteering programme launched by the Foundation and Crédit Agricole S.A. in 2018. The programme has a twofold objective: on the one hand, support microfinance institutions and social impact enterprises financed by the Foundation with technical assistance, and on the other hand, enhance the skills of Group employees who want to invest themselves in projects with high social impact.

HUMO is a microfinance institution in Tajikistan, which aims to support vulnerable and underserved populations living in rural areas through financial and advisory services for small businesses. Julien Leroy, Innovation Leader at CA-CIB accompanied the institution in the transformation of its business.

Feedback on the programme with the interview of Firdavs Mayunusov, Finance Officer at HUMO.

1) Why was the optimization of your business model important for your institution?

The financial sector has long been one of the most conservative and non-digitalized industries in the world. Experience shows that the introduction of innovations and new technologies dramatically increases competitiveness and improves customer experience. However, for the development of innovations and cutting-edge solutions, it is important to reengineer the business model and organizational structure.

17 years ago, Humo was launched to improve access to finance and social development in Tajikistan. Today, the requirements for financial products are changing rapidly. It is important to constantly evolve and transform into a tech company, not just a financial institution. This is the key to reaching the mission and unlocking the potential of the region. Therefore, we have begun the digital transformation and are making the company structure more flexible and product-oriented.

2) What did you expect from the Solidarity Banker? Do the results match your expectations?

Humo expected advice and guidance on business transformation. Thanks to Solidarity Bankers, we were able not only to understand our weaknesses, but also to find new opportunities for growth and reinforce business model. Now, two years later, we have implemented most of the recommendations and started digital transformation. We were able to take a fresh look at the business model and develop a transformation strategy. The results exceeded expectations.

3) What were the priorities defined following the recommendations made?

We thought about the role of innovation and organizational change for business development. The company must be more flexible and faster to compete in the market. First of all, we opened a new Product Department to manage cutting-edge financial solutions. Then we began to rethink the customer experience and opened a Sales Department. Finally started digital transformation and implemented agile methodologies. This made it possible to become one of the most technological players on the market.

4) 2 years and a bunch of Covid-19 waves later, what is the major mark the Solidarity Banker left at Humo? 

Over the years, Humo has changed the organizational structure, strengthened the business model, and identified opportunities. Optimized core business processes and minimized bureaucracy. The company has become more agile, strategy-focused and has launched several digital products. We attracted new user segments and became one of the leading FinTech in Tajikistan. Thanks to the Solidarity Banker, Humo was able to choose the right path of development and realize the potential for growth. Today Humo is undisputedly one of the recognized market leaders despite the challenges of Covid-19, legislation, and socio-economic development.




© Didier Gentilhomme

Solidarity Bankers is a skills volunteering programme launched by the Foundation and Crédit Agricole S.A. in 2018. The programme has a twofold objective: on the one hand, support microfinance institutions and social impact enterprises financed by the Foundation with technical assistance, and on the other hand, enhance the skills of Group employees who want to invest themselves in projects with high social impact.

Missions can take place during the Solidarity Banker’s working time and/or during holidays (volunteering).

Currently, three missions are to be filled in the field (field missions last 2 weeks and are organized in accordance with the rules for international travel enacted by the Crédit Agricole group):

  • “Digital Strategy” mission in favor of Smart Credit (Moldova)

Smart Credit is a microfinance institution created in 2010 by 5 local professionals having one same vision: providing financial services to socially disadvantaged people and small entrepreneurs in Moldova. The institution has more than 3,000 active borrowers and manages a portfolio of 4.4 million euros.

The Solidarity Banker will be in charge of helping to build the digital strategy of Smart Crédit. The expert is an employee of the Crédit Agricole Group who is fluent in English and has experience in IT project management.

For more information, download the term sheet.

  • « Marketing » mission for Lazika Capital (Georgia)

 Lazika Capital is a microfinance institution created in 2000 by Oxfam Great Britain in Georgia. Its mission is to facilitate access to financial services for low and middle income entrepreneurs. Lazika Capital is among the leaders in the Georgian microfinance sector and has nearly 14,000 clients.

The mission will take place in pairs. The selected Solidarity Banker will be responsible for evaluating the organization’s actions and marketing strategy as well as developing a marketing plan for the end of 2021/2022. A first Solidarity Banker was selected for the mission; we are now looking for her partner. Junior profiles accepted.

For more information, download the term sheet.

  • “AML-CFT” mission in favor of SEF (South Africa)

SEF is a microfinance institution that was established in 1992. Its mission is to “work aggressively towards the elimination of
poverty by reaching the poor and very poor with a range of financial and non-financial services to enable them to realize their potential”. As of December 2020, the institution serves 225 317 active borrowers (100% women and 100% in rural areas) and manages a portfolio of € 45 153 765.

The selected Solidarity Banker will be responsible for analyzing the environment, the regulatory framework and the AML-CFT risks that SEF faces, updating the procedure and leading training on the risks and AML-CFT prevention devices. At least 5 years of experience in compliance is required.

For more information, download the term sheet.

To apply: send your CV and cover letter (or a few lines explaining why you are interested in the mission) to :


© Didier Gentilhomme

The Grameen Crédit Agricole Foundation is one of the 10 winners of the Global Environment Facility (GEF) Challenge Programme for Adaptation Innovation, a competition that provides seed funding for innovative initiatives designed to help vulnerable countries cope with the worsening climate crisis.

The GEF Challenge: Supporting innovations to cope with climate change

The GEF Challenge Programme for Adaptation Innovation catalyzes innovation and private sector action in support of vulnerable populations. Open to direct submission from technology and private sector innovators, this Challenge Programme supports models for scalable and bankable climate adaption solutions for adapting to the adverse impacts of climate change.

The GEF has announced 10 new winners, out of 418 submissions, of its Challenge Programme for Adaptation Innovation. Each winning concept will be eligible to receive grants from the GEF-hosted Special Climate Change Fund and Least Developed Countries Fund, which have provided, over the past 20 years, targeted financing for climate resilience projects in developing and low-income countries.

The Grameen Crédit Agricole Foundation’s project

Little public and private financing exists today for climate change adaptation and biodiversity conservation, especially for the inclusive finance sector. One of the main reasons for this is that the sector lacks common framework and indicators to assess the opportunity of Financial Service Providers (FSPs) to develop and scale up this type of offer.

In coordination with five other institutes, including its partner YAPU Solutions, the Foundation aims to provide public and private actors with common intervention frameworks, indicators and specific products to help them coordinate their methodology, activities and propose a concrete offer. This will enable FSPs to receive financial, technical and technological support to accompany the adaptation to climate change and biodiversity conservation for their clients, especially the most vulnerable: small producers and rural communities.

The approach draws on existing and proven UNEP Microfinance for Ecosystems Based Adaptation (MEbA) project methodologies and the Green Index 3.0 of the Green Inclusive and Climate Smart Finance Action Group (GICSF AG). The scope is to support FSPs to monitor and improve the climate change resilience and biodiversity impacts of their institution and their clients. The present project builds on these preliminary experiences and it aims to roll-out this approach for the benefit of the full inclusive finance sector.

“Initially, the Foundation will set up a blended finance vehicle and pilot this triple assistance programme (financial, technical and technological) with four microfinance institutions. We then want to engage other actors to use this vehicle and the proposed tools. It’s fully part of our strategy to support our partners to strengthen their adaptation to climate change in serving smallholders and rural communities.” – Eric Campos, Managing Director, Grameen Crédit Agricole Foundation.

Download the press release 

A Solidarity Banker in Tajikistan

Solidarity Banker – OXUS Tajikistan ©Olivier Mancini

Launched by the Grameen Crédit Agricole Foundation and Crédit Agricole SA in June 2018, Solidarity Bankers is a skills volunteering programme aimed at all Crédit Agricole group employees for the benefit of microfinance institutions or impact businesses supported by the Grameen Crédit Agricole Foundation. Olivier Mancini, Crédit Agricole du Languedoc’s Solidarity Banker, carried out a field mission in favour of Oxus Tajikistan (OTJ) in September 2021.

Testimony of Olivier Mancini, Head of Collection Processes, Crédit Agricole du Languedoc.

An unfailing motivation

I discovered the Solidarity Banker programme through a call for applications launched by the Grameen Crédit Agricole Foundation at the end of 2019 on the creditagricole.info website. The offered mission, in favor of Oxus, a microfinance institution in Tajikistan, caught my attention and motivated an initial contact.

After a rewarding experience in Zimbabwe in 2018 as part of a solidarity leave I wanted to invest myself again in volunteer assignments or training missions with adults, preferably abroad. Immersion in a new context, the discovery of a different culture and the opportunity to practice a foreign language strengthened my motivation as much as the desire to share my knowledge.

When the mission in favor of Oxus was launched early 2020, I did not hesitate to apply! As the objective of the mission matched with my activity, my application caught their attention. I then carried out several interviews with the Foundation’s teams before being definitively selected. That was without taking Covid-19 into account: impossible to avoid the postponement of the mission. Never mind, it would leave me plenty of time to prepare the field mission upstream.

Mission preparation

Created in 2006, at the initiative of ACTED and following the adoption in Tajikistan of laws on microfinance, Oxus Tajikistan (OTJ) is a microcredit organization which grants loans mainly to micro entrepreneurs and farmers in rural areas. Partner of the Grameen Crédit Agricole Foundation since 2012, OTJ aims to improve the economic and social conditions of low-income populations excluded from the traditional banking system.

The objective of the mission was to review the valuation process for different types of guarantees and to consider the introduction of additional valuation methods in order to be as close as possible to best practices in this area. To achieve this result, the mission had to be well framed and prepared before joining the teams in the field. So I learned about the principles of microfinance and I studied the internal documentation of the institution in order to acquaint myself with their procedures. I have also spoken many times with OTJ and the Foundation to best formulate the expectations of the mission.

Once the terms of reference were finalised and the health situation improved, I only had 5,000 km to go and 18 hours of flight left to achieve the mission!

In the direction of Tajikistan

I arrived at 3:00 am in Dushanbe and was welcomed by Bakhtyior. I immediately had to cope with the language barrier: I don’t speak (unfortunately) Russian nor Tajik, but thanks to a few words shared in English, we managed to communicate on the essentials.

The next morning, meeting with Vantasho, Chief Executive Officer, then with the managers of the various divisions to get a better understanding of the conduct of activities. I was also able to speak with beneficiaries to discuss with them the requests for financing and the characteristics of the goods offered as collateral. The documentation and information collected on site, in addition to the documents studied previously, enabled me to construct and submit my recommendations to Vatansho. With its validation, I continued the work started with Umedjon, Chief Risk Officer, and Shurhat, Chief Financial Officer, to establish the foundations of a new methodology for valuing guarantees and then providing the elements supporting this new method to be implemented.

The mission in the field lasted 10 days, which was sufficient to meet the terms of reference of the mission and develop the supports necessary for the implementation of the recommendations planned a few weeks after my departure. In this perspective, the mission will continue remotely for a few days of support in order to provide additional insight and vision on the implementation modalities and assessment of the relevance of the methodology.

An unforgettable experience

This experience undoubtedly exceeded my expectations, both on a human and professional level.

Confronted, over a short period, with the expressed desire to fulfill the objectives of the mission in order to provide concrete and appropriate responses, I was able to count on the great availability of all OTJ employees regardless of their function. I was also able to rely on the expression of a mutual critical look in a real spirit of openness by my main interlocutors. The co-construction of the offered solutions was very rewarding, especially since it was necessary to achieve the same requirement in terms of consistency and solidity of the recommendations as in my professional activity, but with clearly fewer external facilitating tools. It is thus a real satisfaction to have been able to contribute to the evolution of the organization’s practices with OTJ team.

Obviously, and despite the short stay, the human experience is unforgettable thanks to their hospitality. The (many) moments of conviviality were real opportunities for sharing. It allowed me to learn more about the history of Central Asia, Tajikistan and even their personal history. I would do it all over again with great pleasure. I keep the precious memory of people who greet with their hand on their heart but who also are big-hearted.

I would particularly like to thank the people of Crédit Agricole du Languedoc who supported my project; to Caroline Brandt, Carolina Viguet, Cécile Delhomme from the Grameen Crédit Agricole Foundation who made this mission possible; to Aurélie Cacciotti of Crédit Agricole SA for logistical support; and of course to Vatansho Vatanshoev, CEO of OTJ, and Umedjon shodiev, Head of Risks, Shurhat Zoidoc,CFO, as well as to all the OTJ teams for their help and welcome, with a special greeting to Bakhtyior and Yosuman.


The Grameen Crédit Agricole Foundation will lead a new technical assistance program to develop micro-insurance in rural areas


The Grameen Crédit Agricole Foundation receives a new technical assistance grant of 900 000 € from POPARCO to facilitate rural communities’ access to insurance products.

Insurance products are tools that enable to protect people against a series of risks, particularly related to diseases or natural disasters. They are drivers of economic development and social well-being. Yet the penetration rate of insurance in Africa is less than 2%. To address this, it is essential to ensure the sustainability of insurance products for people excluded from traditional insurance markets.

New technical assistance programme : training of microfinance institutions (MFIs) to micro-insurance

The Grameen Crédit Agricole Foundation receives a technical assistance grant of 900 000 € from POPARCO, a subsidiary of AFD group, in order to implement a micro-insurance programme with the International Labour Organization (ILO).

This new technical assistance programme will enable the Foundation to train and support partner microfinance institutions so that they can add new insurance services to their products, including agricultural insurance. Their clients, vulnerable individuals often excluded from insurance products (low-income households, women, smallholders, microenterprises and small and medium-sized enterprises) will thus be better protected and will be able to increase their resilience to climate, economic and sanitary shocks.

The Grameen Crédit Agricole Foundation will be able to rely on the expertise of the ILO’s Impact Insurance programme to develop this programme and train nearly a dozen partner MFIs in Africa and South-East Asia.

The Foundation had already obtained a guarantee of 10 million euros from the AFD group to support these partner institutions in sub-Saharan Africa during the Covid-19 crisis at the end of 2020. This guarantee, as well as this grant, is part of the long-standing partnership between the Foundation and AFD / PROPARCO that started in 2013 with the launch of the African Facility programme which comes to an end in December 2021.


Download the press release



More information on the Foundation’s technical assistance offer: //www.gca-foundation.org/en/our-technical-assistance-offer/

Signs of economic recovery remain mixed

©Ed-Dunens / Adobestock

ADA, Inpulse and the Grameen Crédit Agricole Foundation joined forces in 2020 to monitor and analyse the effects of the COVID-19 crisis on their partner microfinance institutions around the world. This monitoring was carried out periodically throughout 2020 to gain a better insight into how the crisis has developed internationally. We are extending this work this year, on a quarterly basis. The conclusions presented in this article follow the second quarter of 2021. With this regular analysis, we hope to contribute, at our level, to the construction of strategies and solutions adapted to the needs of our partners, as well as to the dissemination and exchange of information by and between the different stakeholders in the sector.

In summary

The results presented in the following pages come from the seventh survey in the series shared by[1] ADA, Inpulse and the Grameen Crédit Agricole Foundation. Responses from our partner microfinance institutions (MFIs) were collected in the second half of July 2021. The 78 institutions that responded are located in 40 countries in Sub-Saharan Africa (SSA-32%), Latin America and the Caribbean (LAC-30%), Eastern Europe and Central Asia (ECA-22%), North Africa and the Middle East (MENA-9%) and South and Southeast Asia (SSEA-6%).[2]

The fairly positive overall trend nevertheless conceals highly contrasting realities, with the largest number of institutions returning to growth and others continuing to encounter difficult economic conditions. The first group shows growth in their assets and positive development projections for the end of 2021. This outlook remains measured nonetheless (mostly between 0 and 10% of portfolio growth) as factors such as client demand and risk management continue to affect expansion opportunities.

Conversely, some institutions are facing difficulties specific to health contexts, the effects of which are weighing on economic life and are having a strong impact on transaction volumes. As a result, the profitability of their financial performance has been affected to the point of having a negative effect on the equity capital of the most fragile.

  1. An operating environment that continues to improve overall

The reduction of operational constraints and the gradual recovery of business activities are again confirmed in this latest survey. Needless to say, this trend hides some disparities that are less well oriented due to the measures taken to fight the spread of the virus. At the beginning of July 2021, 47% of the institutions surveyed said that they no longer faced operational constraints on a daily basis (Figure 1). Also, all constraints relating to traveling in the country and meeting clients do not concern more than 20% of respondents.

This is reflected in the level of activity of the institutions: 72% of the MFIs have either returned to a pace similar to that before the crisis or are experiencing a gradual recovery without major interruptions (figure 2). This phenomenon is particularly visible in the ECA region, where the level of activity has not declined for almost all institutions. In the LAC and SSA regions, a majority of organisations are in the same situation (63% and 68% respectively). In these areas, the difficulties are particularly acute in East Africa, Panama, and Honduras. Finally, for MFIs in the MENA region, the trend is towards recovery while those in SSEA are largely facing new difficulties (Cambodia, Laos, Myanmar, Sri Lanka).

  1. Part of MFIs have returned to growth

It is in this context that MFIs continue to disburse loans to their clients. Whereas the increase in portfolio at risk (PAR) and the reduction in the loan portfolio were the major financial consequences of the crisis in 2020, only 36% of the MFIs surveyed in July still report a decline in their outstanding loans (figure 5).

This positive analysis masks a slow process, however, as shown by the response of our partners to whether they met their disbursement targets in Q2 2021. More than half (53%) indicated that they did not meet their disbursement targets in this period, a figure that is relatively close to that obtained in Q1. This result is not entirely correlated with an organisation’s level of operations: more than half of the MFIs in the LAC and SSA regions report unmet targets despite a favourable operating environment. Note that three major reasons are cited by MFIs that did not meet their growth targets this quarter: the drop in amounts requested by clients (45%), clients’ reluctance to commit to new loans (43%), and managing risk by focusing only on existing clients (38%). Thus, MFIs in the EAC region are the exception with excellent performance in Q2 2021.

Even if these indicators reveal an inconsistent pace of development, the year 2021 is expected to end with growth in outstanding loans for the vast majority of MFIs. In fact, 86% of the institutions surveyed expect to have more outstanding loans than in December 2020 by the end of the year 2021. This growth will be reasonable for a large proportion of them: 44% of respondents expect portfolio growth of between 0 and 10%, particularly in the MENA and Latin America & Caribbean regions. For slightly more than a third of MFIs (36%), it will be between 10 and 30%. Projections are split between these two estimates in the other three regions analysed. Finally, it should be noted that 10-20% of MFIs in each region expect to reduce their outstanding loans.

  1. Credit risk remains under control but is still present

Despite these reassuring signs of portfolio growth, MFIs still face a high credit risk, a lingering remnant of the crisis. In point of fact, 58% of respondents in Q2 2021 stated that the current portfolio at risk remains higher than in early 2020. While some institutions still have an active moratorium (only 5%), the loans of clients in trouble at the beginning of the crisis are now showing up in the PAR as restructured or delinquent loans. In addition, there are clients in arrears who did not have a moratorium. All these loans are provisioned to cover the proven risk of default. The decline in profitability is another major financial consequence of the crisis, fuelled by the sharp increase in provisioning expenses and the reduction in the number of outstanding loans.

In detail, it appears that 59% of our partners have increased their provisioning levels compared with before the crisis (Figure 6). For most (71% of these 59%), the increase is between 0 and 25% of the usual amount, a situation that is found in every region except the SSEA. Conversely, there is a group of MFIs (40%) that no longer see a major increase in credit risk and whose provisioning expenses are similar to the past or even decreasing. In this respect, the ECA region again stands out, as this is the case for nearly 60% of the organisations surveyed in the region.

As we noted in our recent studies, however, this has not yet translated into a very large increase in loan write-offs. At the end of Q2 2021, 59% of respondents indicated that loan write-off levels for the year were either down from previous years or at the same level. Nevertheless, 13% of MFIs had to write off at least twice as many loans as they did before the crisis.

  1. Equity has been largely unaffected so far

The profitability of microfinance institutions is affected by the return of business activities, the variation in outstanding loans and the risk coverage (factors presented in the foregoing paragraphs). The trend is downward for 51% of our partners (Figure 5). However, the information collected at the end of June 2021 is reassuring: 80% of respondents have a level of profitability that is at least balanced, which does not affect the capital of their structure (Figure 7). In the same vein, despite a negative result, 11% of respondents do not feel pressure on their equity. The situation is nonetheless more critical for 8% of the partners surveyed, whose level of capitalisation is at risk, leading to a potential breach of covenant with their funders or the regulator.

Given the difficulties faced by some of the clients, whom are up against new waves of complications related to COVID-19 or other factors, potential losses could affect the solvency of microfinance institutions. Some of them already require the intervention of their shareholders or investors. In our last study, we learned that the type of shareholder that institutions want to turn to depends on the reason why this support is needed (to cover losses or to grow). This survey shows that 20% of the respondents are already confronted by this issue: needs may arise despite recent capital support, but some MFIs are also without a solution in this regard (10%). These cases show that the impact of the crisis will still be felt by institutions already hard hit by this unprecedented period, but also by less robust MFIs. Vigilance on capital need remains necessary as the long-term impact of credit risk could turn the tables on other organisations if the overall situation does not improve, for example with the arrival of new epidemic waves.



[1] The results of the first five surveys are available here : //www.gca-foundation.org/en/covid-19-observatory/, //www.ada-microfinance.org/en/covid-19-crisis/ and //www.inpulse.coop/news-and-media/

[2] Number of responding MFIs per region: ECA 17 MFIs; SSA 25 MFIs; LAC 24 MFIs; SSEA 5 MFIs; MENA: 7 MFIs.