Impact of COVID-19 on smallholder farmers, producer organizations and MFIs in Burkina Faso, Ethiopia, Rwanda, Senegal
This insight brief (PDF) by ICCO Cooperation draws together findings resulting from a study investigating the diverse impacts of the COVID-19 pandemic and associated restrictions on smallholder farmers and microfinance institutions (MFIs) across four countries (Burkina Faso, Ethiopia, Rwanda and Senegal). The COVID-19 pandemic has sparked a severe public health crisis across the world. To reduce the spread of the virus, governments have imposed a number of restrictions on movement and assembly. The top 5 study insights are: 1) The COVID-19 restrictive measures have far-reaching effects on every phase of the agricultural cycle, and at all levels of market systems. 2) The flows of agricultural inputs, labor and produce are inhibited, which results in lower quantity and quality of produce. 3) Smallholder farmers and producer organizations experience great difficulties in marketing their produce and accessing buyers, which results in less income, while costs for transportation are increasing, because of scarcity. 4) MFIs report repayment delays and increasing numbers of clients defaulting on loans, which puts their own liquidity at risk. 5) The observed effects of COVID-19 (restrictions) are expected to continue having a negative impact in succeeding seasons. For future-proof farming, building resilience to disruptive shocks and market volatility is required. Thereby the pandemic has highlighted the importance of mobile banking for facilitating access to finance during crisis conditions, and the potential of remote financial access for reducing both the costs and risks associated with traditional banking practices. Producer organizations should be supported to support their members and MFIs require improved risk management.