Research is the most prominent among the InM activities. The major focus of its research is on microfinance, poverty, and development issues. InM conducts research studies independently and/or jointly with distinguished researchers and institutions from home and abroad. The underlying objective of the research agenda is to get insights into the problems of poverty and development and also to assess the impact of different interventions.
Developing Capacity of MFIs for Fighting Covid-19 Impact in Bangladesh
Since the early 2020, the Covid-19 pandemic has seriously affected the lives and livelihoods across all countries in the world. These countries, including Bangladesh, are now fighting to contain the spread of the virus by testing and treating patients, carrying out contact tracing, limiting travel, quarantining citizens, imposing lockdowns and physical distancing, and cancelling large gatherings. Moreover, Covid-19 is more than a health crisis; it has created devastating social, economic and other crises that are leaving deep scars in society and the economy of all countries. Every day, jobs and incomes are being lost, along with grave uncertainties regarding the time when normality would return.
In Bangladesh, since the outbreak of the pandemic, the MFIs and their customers have been facing enormous challenges to cope up with the situation. The crisis threatens health and economic prospects of the poor MFI borrowers as well as the microfinance sector itself. As the vast majority of the MFI borrowers become vulnerable, it also creates a serious threat to the day-to-day activities of MFIs and on their sustainability. In response to the Covid-19 pandemic, InM is conducting a quick survey among the MFIs to gather their responses on key challenges and analyse how the microfinance sector is being affected by the pandemic including the impact of the pandemic on MFIs’ institutional sustainability and identify required policy responses.
Covid-19 and Financial Management of the Urban Middle Class
For capturing the impact of Covid-19 pandemic on the financial behaviour of the urban middle class, InM is conducting a quick online survey. The prime objective is to analyse how the economic behaviour and the choice of financial instruments by the urban middle class have been affected by the pandemic. The study will also focus on how the patterns of income, expenditure and savings have changed over the past few months, whether the pandemic has an impact on digital financial inclusion and whether there are any changes in the preference pattern of financial products due to Covid-19. These will help to suggest appropriate policy responses for the post Covid-19 period.
Opportunities and Challenges for MFIs during Covid-19
The MFIs in Bangladesh have travelled a long way since the country’s independence in 1971 along with significant transformations from group-based limited-scale microcredit operations to individual microenterprise operations in order to create more widespread and sustainable development impacts. Throughout these years, microcredit has graduated from its mainstream activity of supporting basic needs of the poor people to nurturing broader farm and nonfarm activities and microenterprises of the graduating microcredit borrowers and microentrepreneurs. The focus on ‘appropriate’ finance–along with working in the remote areas; mobilising the poor for promoting social development; creating awareness on health, education and women empowerment; providing access to technologies and income earning opportunities—has provided the MFIs a unique opportunity to emerge as important partners of development in Bangladesh, especially during difficult times such as the present pandemic.
In Bangladesh, many poor people and micro-entrepreneurs rely on various financial services offered by the MFIs including credit, savings, remittance transfer, loan insurance etc. The pandemic has seriously affected the workplace and earnings of the MFI borrowers to substantially weaken their repayment capacity. Most of the MFIs, especially the smaller and mid-sized ones, are facing hardships and difficulties in paying full salaries to their staff with no available avenues to continue their activities in the coming months.
Under the InM research on ‘Opportunities and Challenges for MFIs during Covid-19’, a quick survey is currently on going to gather information on operational and crisis management measures taken by the MFIs, crisis response measures for the borrowers adopted by MFIs and the design of new products/services/markets that the MFIs plan to develop in the medium term