Supporting partners’ innovative responses to Covid-19
Since the start of the Covid-19 pandemic, Oikocredit has helped partners and their clients and members stay safe, be informed and cope with the crisis. Building on from our coronavirus solidarity fund, our Innovation in Response to Covid-19 programme supports partners in developing adaptive solutions with the people they serve.
Oikocredit reacted rapidly in the early months of the Covid-19 crisis and allowed partners to delay repayments, arranged webinars for partners on liquidity management and business continuity planning, and supported those most in need through a dedicated coronavirus solidarity fund. The solidarity fund, launched by the Oikocredit International Support Foundation (ISUP) in April 2020, has supported partners’ financial inclusion clients and cooperative association members in meeting emergency needs, buying sanitation equipment and other measures to comply with government pandemic regulations and to stay in business.
The solidarity fund started with a € 25,000 contribution from ISUP. This was quickly augmented by contributions from Oikocredit members and investors. By the end of 2020 the fund had distributed € 70,287 to 38 organisations in 19 countries in Africa, Asia, and Latin America and the Caribbean.
Launch and scope of the new programme
Although applications for emergency support from Oikocredit’s solidarity fund declined in the second half of 2020, we saw that the pandemic continued to affect partners and their clients and members. ISUP decided to use the funds still available and to increase its contribution to initiate a new capacity building programme. This new programme, called Innovation in Response to Covid-19, provides funds that support partners’ innovative solutions for more vulnerable clients and members in coping with the pandemic and helps partners prepare for the post-pandemic reality.
Innovation in Response to Covid-19 was launched in October 2020 with an initial € 30,000 from ISUP and € 17,740 from Oikocredit Stiftung Deutschland (the non-profit foundation of Oikocredit support associations in Germany). As before, the initial amount soon increased with a further € 76,424 from members and investors including Oikocredit Nederland (the Netherlands support association). Current programme funds, both disbursed and awaiting allocation, total € 124,164.
The programme is open to applications from all regions and sectors where Oikocredit works. Proposals are required to address problems generated by Covid-19 and must aim to deliver direct benefits for partners’ clients and members, including maintaining agricultural partners’ value chains in the face of travel restrictions and quarantines.
To date eight innovative capacity building projects have been approved for the programme, including digital training and solutions for rural clients, support for livelihoods diversification, organisational strengthening, a financial education campaign and community cooperative stores. We describe three of these projects below.
Digital solutions for rural clients in Uganda
A Ugandan partner, Encot Microfinance, and a former partner have developed digital products to help rural clients continue to access financial services during the pandemic. This project, which the Social Performance Task Force’s Responsible Finance Inclusive facility also supported, ran from October 2020 to May 2021. ISUP’s contribution was € 5,650.
Each of the two microfinance institutions (MFIs) undertook a client survey to identify gaps in their current digital lending services. Based on survey outcomes, they worked with technical assistance partners to develop and upgrade (respectively) their current offering. For Encot, this resulted in a new digital loan product, Flex Loan, for sunflower farmers, whose uptake has been good since launch and for which Encot is now developing a mobile app. For the other MFI, the survey revealed a need to reduce clients’ transaction cost and for a higher minimum withdrawal amount. This former partner also refined its emergency loan product and digitised its disbursements and client repayments. Both organisations benefited from staff and client training. Client sensitisation on the benefits and risks of digital finance will continue.
We are monitoring project results with both MFIs, including impacts on clients.
Digital training for village banking clients in Peru
The goal of this project, undertaken by a former partner MFI in Peru, is to provide digital educational services to clients to ensure that they can stay connected and their businesses continue to operate. The organisation uses a village banking microfinance approach. One of the first challenges it faced arising from Covid-19 was to maintain communication with clients as government-imposed lockdowns led to villagers becoming isolated without access to services from their banking institutions. This exacerbated these villagers’ already difficult daily reality. The project started in February 2021 and is expected to complete in September 2021. ISUP’s contribution is € 10,841.
Under the project, MFI staff train clients in digital literacy (email, social networks, video conferencing), Covid-19 prevention business measures, business reinvention and social media marketing. Training modules and materials were designed in coordination with PROMUC, a gender-focused national umbrella development organisation of village banks, of which half are Oikocredit partners. So far, the organisation has trained more than 7,000 clients in business Covid-19 prevention and 1,122 clients in digital literacy.
Community cooperative stores for women and youth in the Philippines
A former partner in the Philippines, which works mostly with women, is implementing this project as part of its support for rural women’s recovery from impacts of the pandemic and long periods of lockdown. The organisation is providing financial education and basic entrepreneurship training, together with micro-loans and repayment deferrals, to enable women to run their own microenterprises. This two-year project starting in March 2021 is piloting the establishment of women-run community cooperative stores. ISUP’s contribution is € 5,000.
Our former partner is piloting stores in selected villages in Talavera municipality, Nueva Ecija province, each managed by 20 to 30 women cooperative members. Project objectives include giving opportunities to women to enhance their livelihoods and leadership and management skills; provision of community access to affordable goods and services; promoting the use of mobile digital applications for financial empowerment; and supporting local producers in product marketing.
Each store will sell goods commonly needed by the population and be a payment centre for micro-insurance, utilities and mobile services including remittances and other money transfers. Stores will also serve as savings hubs and deposit-taking centres for youth and community members, be a marketing base and supply hub for local agricultural producers, and provide a venue for community meetings.
The project has to date provided orientation for community cooperative members and training in the fundamentals of cooperatives, bookkeeping and running community stores. A survey of saleable products within the community has been undertaken. Government mobility restrictions and safety protocols have caused some delays, but the first stores are expected to open shortly. The organisation is also considering providing soft loans whose repayment income will comprise a revolving fund to establish community cooperative stores in more areas.
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