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How microfinance manages a global pandemic: Lessons from Kiva partners

Worldwide, microfinance institutions (MFIs) serve 140 million low-income people, 80 percent of whom are women, amounting to $124 billion in credit portfolios as of 2018. While MFIs provide crucial support to those beyond the reach of traditional banks and financial institutions, these numbers under-report the impact of microcredit on the poor: non-MFIs such as cooperatives, fintechs, and pay-as-you-go businesses are also important players within the microfinance movement.

The COVID-19 pandemic and accompanying economic downturns represent the latest threat to face microfinance. To tackle it, MFIs and other organizations that provide credit and savings services to the poor are mobilizing to sustain their operations, ease debt terms for their borrowers, and improve liquidity in order to continue lending. In turn, investors like Kiva that support such organizations have a more vital role than ever to play in ensuring the survival of the microfinance sector.

Kiva’s global lending partners have seen impacts that include reduced frequency of face-to-face interactions with borrowers, increased risk of falling repayment rates, and complications to day-to-day operations. Nonetheless, partners are drawing on microfinance’s history of resilience to adapt to these challenges and continue serving their customers.

One example is Jibu, a social enterprise that capitalizes and equips entrepreneurs in Rwanda, Uganda, Kenya, and the Democratic Republic of the Congo to create affordable access to clean drinking water. Prior to COVID-19, most customers picked up water from Jibu shops. Now, in the midst of lockdowns, Jibu is using support from a Kiva Crisis Support Loan to ramp up at-home deliveries to ensure that customers do not lack clean water while sheltering in place. Jibu’s recent $100,000 Crisis Support Loan from Kiva is also being used to procure hygienic gear for customer-facing staff and provide subsidies to Jibu franchises for increased operating expenses.


Jibu’s Kiva Crisis Support Loan helps increase delivery of safe drinking water to customers under lockdowns caused by COVID-19.

As self-quarantining and social distancing remain in place to stem COVID-19 infections, microfinance borrowers in the informal economy are among the hardest hit, as they rely on going out to work every day to put food on the table. 

Hekima, a Kiva partner and MFI based in the Democratic Republic of the Congo, helps such customers in the informal sector through village banking, group loans, and agricultural loans. In light of border closings, internal travel restrictions, and curfews, Hekima customers are struggling with poor sales, inaccessibility of their usual supply chains, and reduced market activity. 

In response, Hekima has created a new loan product to support its customers’ urgent liquidity needs. These emergency loans will provide vital economic support to micro-entrepreneurs providing essential goods and services such as food, medicine, and communications.


Representatives of Hekima borrower groups who are using crisis support loans to provide essential goods and services during the pandemic.

In Latin America, Kiva partners are also experimenting with new strategies to help struggling customers. CrediCampo is an MFI specialized in serving rural families and communities in El Salvador. Fundación Paraguaya is a social enterprise in Paraguay that promotes entrepreneurship through a microfinance program for emerging businesses, an economic education program for youth, and an innovative agricultural high school. Both organizations are granting 3-month repayment moratoriums to all borrowers affected by the pandemic. Additionally, as their economies reopen, both are providing these same borrowers with a recovery loan that provides the cash needed to restart businesses.


Clients of CrediCampo (left) and Fundación Paraguaya (right) with loans currently fundraising on Kiva.

MFIs and social enterprises will continue to play an essential role in recovering from the social and economic crises caused by COVID-19. This work will require creative solutions and difficult decisions about providing needed flexibility on repayments, restructuring existing loans, and providing emergency liquidity to customers. Such measures may place a significant strain on microfinance institutions, most of which rely on timely repayments and high repayment rates to remain solvent. This is where social impact-oriented investors like Kiva can step in with products like the Crisis Support Loans and other forms of strategic additional liquidity.

Kiva’s lending partners are at the forefront of helping vulnerable individuals and businesses weather the severe economic impacts of COVID-19. You can make an impact for borrowers and lending partners struggling under the effects of the global pandemic. Contribute to Kiva’s COVID-19 Response fund today.

For further learning, check out this article from CGAP (Consultative Group to Assist the Poor).

About the author

Tamar Honig

Tamar is based in Mexico City, where she has spent the past ten months as a Fulbright Binational Business Scholar. Through this program, she worked full-time at Ashoka, the world’s leading social entrepreneurship organization, and took part-time classes in business and international relations at Instituto Tecnológico Autónomo de México. Before moving to Mexico, Tamar briefly lived on a bush camp in a national park in Zambia, working for a foundation that manages social and ecological projects in protected wildlife areas. Tamar graduated from the University of Chicago in June 2018 with a major in Global Studies and minor in Human Rights. During university, she held positions at the Pozen Family Center for Human Rights, the Chicago Council on Global Affairs, and the Women’s International League for Peace and Freedom. Other opportunities brought Tamar to Bogota, Colombia to work for a nonprofit that promotes women’s roles in peace processes, and to Santiago, Chile, where she studied for a semester at Pontificia Universidad Católica de Chile. She loves to dance, hike, meet new people, map cities’ best cafes and other curiosities, and make and observe art of all kinds.