As part of our partnership with the Mastercard Center for Inclusive Growth and with additional support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the Center for Financial Inclusion (CFI) is launching a research initiative to study policy responses to the COVID-19 pandemic and their impact on the inclusive finance sector. CFI, an independent think tank housed at Accion, aims to provide stakeholders with a better understanding of the policies intended to mitigate the impact of COVID-19 and validate how those policies are impacting low-income customers and the financial services providers that serve them.

The COVID-19 pandemic took the world by surprise in early 2020. In the first half of the year, what began as a health crisis quickly extended far beyond its initial reach to include devastating impacts on the global economy. Policymakers are rapidly responding to the emerging crisis, leveraging instruments ranging from fiscal and monetary policies to exchange rates policies. International bodies, such as the IMF and World Bank, are scaling their support to governments for both their technical assistance and financing needs. The response has been swift and far reaching in an attempt to contain and mitigate the crisis.

Many organizations are tracking policy responses, but few are providing analysis of these policies and their impact on low-income customers. CFI’s research aims to fill that gap. Unpacking how these macro-level responses may or may not impact the lives of low-income customers will be important to understanding the effectiveness of these policies. Additionally, many measures which may appear effective in the short-term, such as a moratorium on loan repayments, may have long-term ripple effects on the inclusive finance sector that must be understood.

CFI will analyze data collected on policy responses by international bodies and engage in direct consultation with in-country stakeholders to assess the impact of policies, both in the short-term and long-term, on low-income customers and the financial providers that serve them. Research will be released in a series of papers, accompanied by a series of virtual discussions. The first paper, released on August 5, 2020, addresses the topic of liquidity.

This new effort is a component of our partnership with the Mastercard Center for Inclusive Growth to increase the financial health and resilience of individuals and businesses, with a refocused effort to support our understanding of the COVID-19 pandemic on low-income populations. Additional support was provided by GIZ, a federal enterprise that supports the German government in the field of international cooperation for sustainable development, as part of a new partnership with CFI.

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