FINANCIAL INCLUSION WEEK 2021
Financial Inclusion Week is an annual gathering of the global community working to advance inclusive finance.
Mastercard Foundation Fund for Rural Prosperity held one of only 15 live, global plenary sessions during FIW2021 which incorporated a panel discussion on Covid-19 impact and opportunities. The session, which was held on Wednesday, 3 November 2021, featured the Fund’s Strategic Investments and Technical Assistance Lead, Grace Mberia, and the Financial Inclusion Lead and Project Manager, Kevin Genga. Two Fund participants, Vincent Tumwijukye, CEO of FutureLink Technologies Uganda and Hervé Nkurunziza, Project Director of Savonor Burundi, were also on the panel.
The session attracted an audience of about 100 people and provided insight on How businesses can adapt to continue serving customers in times of uncertainty. The discussion was centred around how the Fund had acted quickly to support participants weather the crisis and support the recovery and resilience of the portfolio during the COVID 19 pandemic; through a COVID-19 Recovery and Resilience challenge as part of the wider Mastercard Foundation COVID-19 Recovery and Resilience program.
UNCERTAINTIES FACED
Covid-19 has presented unprecedented challenges all over the world and its effects compounded in Sub-Saharan Africa where other factors such as climate effects and political uncertainties have been playing out. The plenary sought to inform attendees on how businesses globally have been affected at a ground level and particularly how Fund participants were able to respond with the assistance provided from the COVID-19 Recovery and Resilience challenge and a planned technical assistance facility.
PLENARY HIGHLIGHTS
Grace Mberia started the plenary by giving a brief overview of the Fund and the Covid-19 Recovery and Resilience challenge and the resulting impact on the Fund’s participants and beneficiaries. She summarised some of the challenges the pandemic posed to participants such as logistical constraints to reaching customers and the risk of recovery of finances lent out to beneficiaries. From consistent interaction with participants and surveys, Grace mentioned that in response, participants facilitated financial inclusion by digitizing payments to beneficiaries through mobile money platforms, integration of microfinance services to provide financing to beneficiaries, sensitization of beneficiaries on new revenue streams and enhancing communication channels to facilitate increased remote communication with partners and beneficiaries.
Kevin Genga introduced the participants and their respective businesses before the panel discussion commenced. FutureLink Technologies (Uganda) and Savonor (Burundi) are two of 38 businesses that received initial funding from the $50 million challenge fund. The two have also received additional support under the Covid-19 Recovery and Resilience challenge. These two businesses have made significant strides in delivering financial inclusion to rural communities in their respective regions.
Hervé Nkurunziza highlighted the impact the pandemic has had on Savonor and its beneciaries. He mentioned that it presented challenges in the importation of raw materials and spare parts for factories; disrupted local and international trade and caused shortages of forex in Burundi. This resulted in reduced production due to long lead times to repair factory machines for example. Secondly, human resources were significantly impacted by the pandemic with staff and their families facing health challenges and ultimately affecting their productivity. Banking and micro-finance institutions were also more reluctant to extend loans to beneficiaries during this period.
Vincent Tumwijukye also shared insights by highlighting FutureLink Technologies’ goal to enhance the resilience of low and middle-income earners by leveraging on existing ‘SACCO’ networks. Vincent pointed out that many farmers encountered low income margins during the pandemic. As a result, SACCO’S working with FutureLink faced liquidity challenges. Human resources were also significantly impacted as was the case with Savonor.
ADAPTATION TO UNCERTAINTY
Vincent demonstrated how FutureLink adapted to uncertainty with its initiative to roll out a toll-free call centre where personalized digital financial literacy was extended to end consumers in a bid to ensure business continuity despite the pandemic. As a result, a rise in deposits with SACCOs was noted during this period that compensated for low loan repayments rates.
Innovation, proper planning, strategic partnerships and clarity of purpose for participants remained key elements to adapting to the changes brought about by the pandemic.
Vincent went on to indicate Covid-19 presented opportunities for beneficiaries in rural areas to embrace digital financial solutions (DFS). DFS has enabled the rural economy to begin integration into the larger financial systems within the economy. He further added that credit scoring of beneficiaries and convergence of this data has made credit facilities more accessible to beneficiaries in rural areas through mobile platforms. Urban communities have also recognised the role played by rural SACCOs and micro finance institutions and identified these entities as investment channels where the money saved with SACCOs can play a role in development of rural areas once lent out to beneficiaries for business.
SUPPORTING ADAPTATION TO UNCERTAINTY IN FUTURE
Businesses require support for continued innovation and sustainability. Vincent mentioned that the cost of acquisition of talent and retention is a key factor in ensuring the success of programs run by businesses. Additional investments would enable businesses acquire the right talent and scale their operations.
Hervé also pointed out that technical assistance to drive integration between microfinance institutions, mobile services and businesses; as well as improvements in the production inputs would greatly support sustainability of entities and their operations.
Grace closed the session by thanking the audience for attending the plenary and highlighting the key themes from the session that included innovation, proper planning and cultivating strategic and collaborative partnerships.
WATCH VIDEO:
A recording of the plenary will be made available here as soon as available from the FIW2021 organisers.
ATTENDED THE FUND PLENARY?
If you attended the Fund plenary session at FIW2021, please let us know your thoughts on it by emailing learning@frp.org.