Due to the global health crisis caused by COVID-19, rising risk and economic uncertainty have become a source of anxiety across the globe. We felt a strong desire to create a platform for discussion among national DFIs and development banks who are having to accelerate their response, either by being drawn into discussions by their governments and leaned on to play a role, or currently sitting on the sidelines and wondering how it is they can help support their economies through the ensuing economic impacts.
Over the past week, we offered two complimentary webinars titled “IFCL Webinar Series: How can NDBs mitigate the economic impact of COVID-19?” – one in association with the Association of African Development Finance Institutions (AADFI), the other with the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP). Our expert panelists shared their insights and provided advice for NDBs on their potential responses.
Through hosting these webinars we were able to engage members of an array of organizations to find out what their questions and concerns are, as well as provide advice on how NDBs can mitigate the economic impact of COVID-19.
Summary:
- It’s crucial that NDBs understand the implications of the crisis in their country’s unique context – in regard to existing clients, the financial sector, potential donors, and what’s going on in the minds of government officials.
- It’s important for NDBs to reach out to their clients as soon as possible to get a good understanding of what their needs are. Are they facing a liquidity issue? A solvency issue?
- It’s also important for NDBs to have a place at their government’s policy maker’s table. They should not wait to be told what to do, but rather engage in discussion and share both what is possible, and what their organizations’ constraints are.
- Reach out to other financial institutions in their country – commercial banks, microfinance institutions, etc. Find out what they’re doing, and where the gaps are.
- NDBs should reach out early to funders – be it government, MDBs or bilateral DFIs – to seek restructuring for borrowings so that they have more capacity to restructure their clients’ loans.
- It’s extremely valuable for NDBs to use the existing players in the financial system, such as MFIs, to quickly and effectively deploy resources.
- It’s important that NDBs consider the situation strategically and implement cost containment strategies quickly to manage their own cash flow.
If you’d like to hear our conversations in full, the webinar recordings are available for viewing at the links below:
The webinar included a dynamic Q&A session with attendees. A summary of the Q&A can be downloaded here.
At this time, IFCL is offering for DFIs to reach out and chat with our experts about strategy and planning. These conversations will be confidential and complimentary to DFIs during the month of April. To arrange a conversation, please reach out to Mr. Greg Eidsness at geidsness@i-financialconsulting.com.
Sending everyone our best wishes in this uncertain time.
