Learning from Leaders: a Cup of Coffee with Dr Godwin Ehigiamusoe
Challenging situations like the coronavirus require new thinking on many levels. Learning from Leaders, a Cup of Coffee with... is a new series of online encounters launched by Oikocredit International.
It was initiated by Kawien Ziedes des Plantes, from Oikocredit’s Social Performance Innovation department. The first edition was held by Dr Godwin Ehigiamusoe, Managing Director of the Nigerian microfinance bank LAPO, which received its first loan from Oikocredit last year. His engagement met with great interest and lively enquiries from the participants - some 50 Oikocredit partners from East and West Africa, the Philippines and Cambodia, as well as Oikocredit staff.
Hans Perk, Regional Director Africa, opened the session by commenting on the current Covid-19 crisis. He began by saying: "We are supporting our partners, offering webinars, resilience testing and business continuity planning, and informal virtual meetings to hear from those responsible on how they are leading their organisations through the crisis. We want to provide a platform where we can exchange ideas and learn from each other".
LAPO was founded by Godwin Ehigiamusoe as a non-governmental organisation (NGO) in 1987. Since September 2012, it has been active as a licensed national microfinance bank in 34 of Nigeria's 36 states and is committed to the social welfare and empowerment of poor and vulnerable groups in Nigeria. Over 90% of the borrowers are women. "The organisation has shown extraordinary commitment to reducing poverty in Nigeria", emphasised Hans Perk. But how can this commitment be fulfilled in the coronavirus crisis?
Dr. Godwin Ehigiamusoe explained the challenges currently facing his organisation, its customers, employees, and business partners:
“Yesterday (7 April) we had 238 confirmed coronavirus infected people in Nigeria. There is a lockdown in two states and in the capital, and in addition there are partial lockdowns in other several states [*]. For many of our customers, this means that they can no longer, or not fully pursue their businesses. Only shops that sell food or medical products can continue to open.
We have therefore considered what our emergency plan is and have based it on three questions:
- How can we protect our customers and employees from infections?
- How do we deal with the adverse effects of the crisis on our business?
- If there is complete lockdown, how can we reduce the negative impact on our customers and the work processes of our organisation?
The response at LAPO was to suspend all meetings and cancel all loan group meetings to ensure the virus does not spread at those meetings. We therefore no longer collect repayments and no longer disburse loans. This also applies to individual borrowers and small to medium enterprises.”
Field staff are currently not on duty, and the teams from the central and regional offices are in their home offices wherever possible. According to Ehigiamusoe, the fact that no loans are currently being disbursed and that there is no outflow has helped to mitigate the negative effect of the delayed collections.
"We are initially working according to a two-month plan," says Ehigiamusoe and continues: "If the crisis lasts longer, what do we do then? We need to look at our cost base to ensure continuity of our organisation. Measures and plans are currently being discussed with our supervisory board."
"We are in the middle of an ocean and do not know the direction in which we are moving," says Ehigiamusoe. This is precisely why the attempt to make a forecast for the coming months and a differentiated plan is immensely important. "We have to constantly reassess our financial situation, our income. Other aspects are our expenses, rents, wages and so on and the expected financial results for the months of April, May and June". And the question of what comes after that, plays an important role for the organisation as well as for individual customers. "We need a wiring diagram. It is possible that our customers may run out of raw materials for their businesses. When they no longer have any operating capital, it may be that they will have used up everything they have, we have to be prepared."
Demand for nationwide support
This is what LAPO itself can do now to face the crisis. But how are government and regulators responding to the crisis? For Ehigiamusoe, there is no question that government authorities understand the importance of financial stability and support for those who are among the most vulnerable groups in society: "The Central Bank of Nigeria has allocated NGN 50 billion to support small and micro enterprises in the country that are affected by the crisis”.
The National Association of Microfinance Banks, of which Dr Ehigiamusoe is a member of the Board of Trustees, is in touch with the Central Bank of Nigeria and has made recommendations on how to spread the funds. Ehigiamusoe added that it was an advantage that there are thousands of microfinance institutions in rural and urban areas throughout Nigeria.
"How do you motivate your employees during the crisis, how do you maintain team spirit and contact with customers, something that is part of our work," several webinar participants asked. "We are always in conversation," answers Ehigiamusoe. “But you do not really have to motivate anyone. We are currently working on offering our employees, especially those in the field, a whole range of training courses on an e-learning platform”. But he also sees, “That the way we work will change after the crisis. There will be a shift. We will see how effective and concentrated we can work without everyone having to be present”. The need to rethink working methods after the crisis is also evident in the group credit method. "Especially now in times of a pandemic, the group method is vulnerable, and it will be a task to balance more individual loans in relation to group loans".
Concerning the contact with the customers during coronavirus times, LAPO has an amazingly simple sounding recipe: the responsible department collects telephone numbers of all customers who have a telephone. As Ehigiamusoe explains: "We talk to our customers on the phone asking how they are, what their situation is. We have been doing it this way for many years. This is incredibly important and highly effective, especially in the current situation. We ask how they are dealing with the crisis, what they are doing to protect themselves and their business and what expectations they have for when the crisis is over. The more information we have, the better we can support them. All this can be done in this time of social distancing and it promotes loyalty and connection".
Watch a short excerpt of the webinar below:
[*] These numbers change daily. One source of current information is: www.africanews.com/2020/04/21/nigeria-coronavirus-hub-updates-covid-19/
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