Group-Based Financial Services and the Coronavirus

Last week I was in South Africa visiting an exemplary organization that provides financial services to people living in poverty.  Their primary distribution system involves groups of clients meeting together every other week.  I attended a repayment meeting, similar to meetings I have been to in many countries.  I saw receipts, folders and pens passed from hand to hand, gathering reviews and signatures as 30 clients sat together in a small space for over an hour.

By the time I returned home, the world had changed.  Bars and restaurants shut down.  Group meetings canceled. My church, like many others throughout the country, had no people in the pews on Sunday morning.  We held an online service instead.

COVID-19 cases have now been reported in 158 countries around the world.  People transmit the virus through water droplets from coughs and sneezes. This make groups meetings, like the one I attended, potential transmission zones.

At the same time, the clients who participate in savings groups, self-help groups and microfinance are often those who will be most vulnerable to the disease.  They may also be the ones most negatively affected by the economic shocks that will follow.

Those of us who provide financial services to those living in poverty have both a responsibility and an opportunity here.  We have a responsibility to keep our staff and our clients as safe as possible.  We also have an opportunity to make sure that the most vulnerable in the society get noticed and cared for in the midst of this pandemic.

One of the best ways that we can do this is to follow what we have always done as a community — learn from each other.  Some of our colleagues are on the front lines right now, dealing with the pandemic as it sweeps through their countries.  Others are in earlier stages, with time to prepare for conditions that are likely to appear in the future.  Now is the time for us to share our actions, successes, failures and ideas. Together we can help improve everyone’s response.

This coronavirus threat has struck as I have been working with my colleague DSK Rao in India to tabulate the latest numbers for total microfinance clients worldwide.  We don’t have the final totals yet, but the number will be something close to 300 million, with most of these clients receiving financial services from organizations that practice some from of group saving and lending. 

Counting clients and their family members, our movement reaches over 1 billion people worldwide on a regular basis. Many of these people live in situations likely to be conducive to the spread of this virus.  As a group, we can play a role in helping to “flatten the curve,” reducing the opportunities for the virus to pass from person to person, limiting the chances for infection.

DSK and I have come up with a simple survey for financial service providers and group savings promoters.  We want to learn what group-based financial service organizations are doing in response to COVID-19.  From this we will do follow up interviews with those organizations that have the most active responses and try to come up with a list of good practices for those who provide financial services through groups.

If you work for a financial service provider, please complete our survey. You can fill out the embedded survey below or go to this link.

Please pass this post on to others in your networks so that they can respond to the survey.