Original Source: CGAP
Many in the global financial inclusion community are concerned about the impact that COVID-19 is having on microfinance institutions (MFIs) and their clients. In CGAP’s conversations with stakeholders over the last several months, we have repeatedly heard the following questions:
- How is portfolio quality being impacted by COVID-19?
- Are MFIs facing a liquidity crisis?
- Is the solvency of institutions at risk?
- What is the outlook on the sector among MFIs?
So far, nobody has had the data to answer these questions from a global perspective. The biweekly CGAP Global Pulse Survey of MFIs was created to fill that gap and attempt to provide some answers. With the survey now live for two weeks, data are still coming in from MFIs around the world, and we are only beginning to analyze the findings. That said, we can start to see the outlines of some answers.
How representative of the sector is the survey?
Before getting into the findings, it is worth noting the limitations of the data. Firstly, with 180 MFIs reporting, this is still a relatively small share of the sector. Second, there may be selection bias in who has responded. Third, the data are self-reported and have not been validated, beyond basic consistency checks. As the survey continues with additional waves, we hope to expand the sample with more MFIs. We would ask for your help in that regard by encouraging MFIs in your networks to sign up and complete the survey here.
So let’s start with a few points about our sample. One hundred and eighty MFIs responded to the first wave of our survey, conducted June 1 – 15, 2020. Most are from Sub-Saharan Africa (41 percent) and Latin America and the Caribbean (25 percent). In total, participating MFIs have about $14.59 billion in assets, for an average asset size of about $85.3 million. Most (39 percent) are medium-sized firms with between $10-100 million in assets, followed by smaller (37 percent) and larger institutions (17 percent). Survey respondents were also much more likely to be regulated (80 percent) than not.
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