Cover photo: As a street vendor, Tamar Kumar Prahan struggled to provide for his family during India’s lockdown. A loan from Accion partner Annapurna Finance helped him restart his business.

One year ago, COVID-19 irreparably changed the world. The pandemic has taken — and continues to take — an especially devastating toll on low-income people and small businesses everywhere. People who typically buy food and get paid in-person each day suddenly lost their jobs or businesses. They were hurt more by the pandemic than anyone else. They are still suffering, and their road to recovery is more fraught and longer than anyone else’s.

At Accion, the financial tools we provide are critical to that journey. We responded quickly to support the resilience of our partners and their clients. We knew from previous crises that frontline financial service providers have a vital role in helping vulnerable people access the financial tools they need to weather difficult times and rebuild their livelihoods. Underserved people need savings, credit, and insurance, as well as digital skills and tools, in order to pivot a business or build financial resilience for their families.

But financial service providers also faced their own challenges. In the early days of the pandemic, microfinance banks and fintech lenders faced a liquidity crisis that threatened their collapse, with potentially devastating consequences for millions of micro, small, and medium-sized enterprises (MSMEs) who depend on them for funding and growth.

Supplementing critical relief from national governments, Accion helped struggling partners around the world from a variety of angles:

• We helped partners provide grace periods and business support to clients with little or no ability to repay their loans.
• We leveraged digital technologies to help partners stay in touch with clients and support those most in need, like the elderly or those living in rural areas.
• We worked with partners to understand the impact of the crisis on their balance sheets, build their financial runways, and shift their go-to-market approaches.
• We assisted in setting up companies for extended periods of remote work and helped maintain staff morale.
• We gathered CEOs from around the world to share their latest insights and learn from each others’ failures and successes.
• We also transformed how we work—learning to collaborate with partners, conduct due diligence, and provide governance support remotely.

Ultimately, our work to support our partners helped clients like Grace Ogunleye in Nigeria prevent her nursery and primary school from closing permanently. Our work helped clients like Rosa Tipula Quispe in Peru gain the critical financing she needed to keep her shop open during the lowest point of quarantine. And our work helped clients like Karen Villamizar in Colombia gain the digital skills she needed to transform her confectionary business in our increasingly digital world.

Transitioning from response to recovery – three strategies

As more vaccines are distributed and the global recovery gets underway, we must keep the lessons of this past year at the forefront of our plans to ensure vulnerable and low-income people aren’t left behind.

1. Embrace digital technology, but prioritize people

The digital transformation of financial service providers is key to their survival and effectiveness going forward, but this process must put clients first. Clients need the necessary skills and trust to use digital tools, and their specific needs must be addressed as we design and launch digital products. We must help MSMEs digitally transform as well, and ensure they gain the digital know-how they need to participate in and benefit from the digital economy.

2. Focus on vulnerable groups

Groups that have endured the worst effects of the crisis—including women, those in rural areas, and business owners of color in the United States—are most vulnerable to the continued economic effects of the pandemic. We must provide them with targeted support to build a truly inclusive and broad-based recovery. This involves seeking out and addressing their unique needs and working to overcome the societal and institutional barriers that disadvantage them.

3. Stay adaptable and flexible

Adaptability and flexibility are vital to the future success of small businesses, financial service providers, governments, and entire countries. For instance, Accion and our partners must continue to adapt to remote work, or a hybrid of remote and in-person work, to prevent potential resurgences of the virus and get things done in our socially distant world. And as economic volatility continues, providers must stay flexible in devising repayment plans, launching new products, and continually assessing their clients’ evolving needs.

The past year has been immensely challenging, but it provided us valuable lessons on building resilience. I’m so proud of how much we were able to accomplish through it all, and I look forward to seeing how our team and our partners will build on these lessons in the years to come.