Coping Mechanisms and Best Practices of MFIs During COVID–19

The COVID–19 pandemic, and the lockdown as a fallout of that, has created an unprecedented situation for the entire world. In India, the lockdown has affected the economy in general and also created myriad problems for the livelihoods of the poor and the underprivileged. The Microfinance Institutions (MFIs) which cater to the financial service needs of these sections of the people were also severely impacted. There were series advisories to the institutions from the sector’s association as well as sane advice from well-wishers as to the path to be followed. Studies brought out the impact of the pandemic and lockdown on MFIs and their clients. MFIs adopted various coping strategies and innovative practices to take care of themselves and their borrowers. They initiated steps to provide relief and rebuild the livelihoods of their poor and underprivileged borrowers. The fact that the MFIs and their borrowers were amongst the earliest to largely return to normalcy underlines the efficacy of the coping strategies and the best practices adopted by the microfinance sector.