Best Practices in Credit Risk Management in Times of Crisis

After several months of isolation measures and restrictions on various economic activities, COVID-19 has resulted in one of the biggest crises worldwide, Latin America being one of the most affected regions. In this regional bloc, there is evidence of a sharp contraction in employment and income, with an anticipated inequity that was already significant even before the pandemic.

In this context, MFIs have had to adapt to the current market conditions in order not to lose competitiveness and to cushion the deterioration of their portfolios as much as possible. This study highlights some good practices identified in various MFIs in the midst of the pandemic, which focus on containing credit risk and taking care of their financial sustainability.