Analysis: Microfinance in Pakistan During COVID
So how did the microfinance sector cope with Covid-19? There had been early reports of massive decline in borrowers’ weekly incomes, amid concerns for loan defaults and business sustainability. Then SECP and SBP stepped in to offer interim relief early on in the lockdowns. With the June-end numbers for the microfinance sector now out, it is time to take an objective look at the initial impact of the pandemic.
Reading the latest data from Pakistan Microfinance Network (PMN), the national body of microfinance providers (MFPs), two negative effects are obvious since March 2020. First, outreach to new borrowers suffered amid lockdown restrictions in Apr-Jun quarter. The number of active borrowers at June-end was 6.9 million, lower nearly 6 percent than March 2020 and lower 4 percent than June 2019.
Photo courtesy of Saad Sarfraz Sheikh.