The COVID-19 pandemic impact on theMicrofinance industry and the role ofdigitalization

Sammanfattning: The COVID-19 pandemic has greatly impacted the microfinance industry, particularly low-income individuals and communities, the bottom of the pyramid population in emerging economies. This study examines the effects of the pandemic on the microfinance industry's value chain as well as the role digitalization have played. Results show that demand for microfinance increased, but repayment rates from borrowers decreased, leading to lower growth in some cases. Microfinance was tested once again, as tool to mitigate disasters and financially support those in need. Thus received more support from stakeholders. Interest from microfinance investment vehicles increased as microfinance became more attractive as a responsible asset class as the industry is projected to grow rapidly in the near future. Microfinance institutions trended toward increasing equity and consolidating. Digital innovation and solutions provided many solutions, but not all borrowers were able to adopt them. The pandemic highlighted the need for policy innovations, digital tools, and resource management in the microfinance industry.