PUBLICATION WEBSITE: COMMUNIQUE ON THE INTERNATIONAL VIRTUAL WORKSHOP ON THE COVID-19 CRISIS IN AFRICA: Social Response and Microfinance
Title to be published: What model for effective community finance in Africa in the context of COVID-19: FAGACE’s contribution?
For the past year, the global economy has been reeling under the impact of the COVID-19 pandemic. Africa has not been spared, but the continent has demonstrated unprecedented resilience to date. What is the impact on countries’ economies, and how can the continent contain this pandemic to better protect its population and national economies?
It is within this framework that the Fonds Africain de Garantie et de Coopération Economique (FAGACE) took part from January 14-15, 2021, in a high-level virtual international workshop on the COVID-19 crisis in Africa initiated by the Beninese Government through the Ministry of Social Affairs and Microfinance.
Indeed, like Benin, governments and monetary authorities are aware of the seriousness of the situation. To this end, social and financial measures have been taken to mitigate the adverse effects of this pandemic on their economies in general, and the most disadvantaged strata in particular.
The impact of Covid-19 varies from region to region, and guarantee institutions have been called upon to contribute to crisis management alongside banks and governments.
FAGACE’s contribution to the January 15, 2021 panel discussion on the theme of “Which model for effective community financing?”, presented by its Managing Director Mr. Ngueto Tiraïna YAMBAYE, lays the foundations for stabilizing economies for recovery via a mechanism for restructuring non-performing loans due to the pandemic, and provides an incentive to the financial sector to mitigate the deterioration in perceived risk in relation to Enterprises.
The Managing Director of FAGACE also pointed out that, in collaboration with credit institutions, FAGACE supports the extension of repayment periods requested by banks and other financial partners for the benefit of project sponsors in difficulty.
Finally, it emerged from the panel discussions that the intensive digitization of means of payment is an effective response to rapid and efficient financing to counteract the health crisis. By way of example, several African governments have proposed support payments, via digital infrastructure and the network of microfinance institutions, for low-income populations. The FAGACE initiative to digitize motorcycle cabs in Rwanda was cited as an innovative example of this, as it provided kitmeters to help reorganize the motorcycle cab sector and develop solutions for motorcycle cab drivers, who now have access to financial services. It has also enabled the State to increase its tax base by controlling the revenues generated by the motorcycle cab business, and finally to fight against COVID-19 with the use of electronic money and the reinforcement of internal security.
By participating in this international webinar on “THE COVID-19 CRISIS IN AFRICA: Social Response and Microfinance”, FAGACE is calling on its various financial partners to converge their efforts to meet the specific needs of markets faced with the negative impacts of COVID 19 in Africa, and particularly in Benin.
