Delinquency Management in the COVID-19 Era

While the general financial services industry has been affected greatly by COVID-19, much of the same applies to the financial inclusion sector—where all stakeholders ranging from low income clients to microfinance institutions (MFIs), non-bank financial institution (NBFIs), Banks, Cooperatives, fintechs and others have been deeply impacted. Many of them are not receiving money from their traditional microfinance and financial inclusion clientele, whose livelihoods have been impacted. Furthermore, these institutions have been mandated  to offer moratoriums on weekly and monthly loan repayments, often varying from three to six months or more. Their liquidity is also impacted, although central banks and governments are trying their best to solve this aspect for them.

The key question here is even if MFIs and banks (commercial banks, microfinance finance banks, small finance banks, etc.), NBFIs, cooperatives and fintechs offer their customers loan repayment moratoriums, how long can this go on in terms of postponing payments? Where will clients get money to pay back? On what basis, can clients ask for future loans? And on what basis will these institutions lend in the future? And who takes the hit (finally)—if and when large scale loan defaults occur—at a later stage?

The webinar will attempt to answer these questions as well as look at the role of institutional and individual equity investors, development finance institutions, wholesalers, larger banks in terms of absorbing losses and putting in more money—even as compulsory and voluntary lockdowns, fear of contagion and other aspects continue.