The Covid-19 crisis came on the back of slow rural economy with climate change and market issues plaguing the agricultural sector. Further acute banking sector problems, with non-performing assets (NPAs) was not the ideal starting point in the first place. Added to these banking woes has been a generalized credit crunch in the financial system due to stresses in the non-bank financial sector. In response to the acute stress caused by the lockdown, critical steps are needed to secure livelihoods and calibrate policies in a manner that its injection and their sequencing is able to ease burdens of local enterprises and underserved populations.
A week into the COVID-19 lockdown, SELCO Foundation reached out to its financial partners, NGOs managing revolving funds and Sa-Dhan the representative body of MFIs to assess the immediate repercussions on their portfolios and the communities they serve. Around 17 financial partners were interviewed, via phone calls. The purpose of this report is to assess the near- and medium-term impact on their organization and the end-users. By creating this base line, SELCO Foundation wanted to come out with mitigation to prevent a potential collapse of the existing systems. The report will take on through the observations, insights and action needed, which can be found below.
