The world’s community banks, credit unions and CDFIs have been taking concrete action to help their clients, communities and employees respond to the coronavirus Covid-19 crisis.
Community banks, credit unions and community development financial institutions (CDFIs) – often seen as the most vulnerable during a crisis – have been early movers in their response to the Covid-19 pandemic, showing their key role in banking responsibility and resilience.
Marcos Eguiguren, GABV Marcos Eguiguren is the director of the Global Alliance for Banking on Values (GABV), which is made up of 62 banks and credit unions across the world. “The core business of our members is lending and they have community-based finance at their core,” he says. “As such, they’re more on top of their clients’ situations because they know their clients personally so can respond quicker to their needs.”
The GABV is gathering the best practices of its members and will put out a white paper in the coming days. “Things are obviously fluid right now and banks are taking action as their central banks and governments react, but we are seeing responses from our members that have been astonishingly quick – sometimes in areas where the virus impact is still early,” says Eguiguren. He points to banks in Paraguay, Nepal, Bangladesh or Peru as examples of early movers. “Some of our members there have already taken measures to give moratoriums to loans or mortgage repayments and some have working on transforming part of their SME loans into longer-term loans,” says Eguiguren.
Banks are also going beyond their traditional remit to offer additional services such as webinars, he adds. “For example, in Italy we have seen one bank that is offering webinars for SME clients to train them on the way they may financially deal with the crisis,” says Eguiguren. “These banks excel at being able to pivot quickly.”