Around the world, governments have responded to the COVID-19 pandemic with varying intensity and conviction, often struggling to balance competing priorities. But months into this new reality, it is becoming increasingly clear in many countries that the state cannot bear the burden of addressing the public health, economic and social impact of this crisis alone. Societies are mobilizing like never before, and in developing economies, the private sector is increasingly taking on the responsibility to support—or supplement—government efforts, even as many businesses themselves face an uncertain future.
Many of FMO’s clients have taken up this challenge with a bold and innovative spirit. FMO is proud to offer them additional support during this period, through Capacity Development, emergency grants, and loan restructuring. Here, we share just a few of the ways our clients have responded to the unique challenges facing their sectors and regions, by shifting their business models, seeking new partnerships and reaching out to their communities.
A handful of governments have come under fire for downplaying the severity of the pandemic and failing to implement social distancing measures. In these countries, where a coordinated national response is lacking, our clients have shown remarkable initiative and leadership.
One of our clients, a large-scale Latin American sugar producer, stepped up at a very early stage to address looming supply chain and public awareness issues. The company activated an early response protocol in 2019 despite its national government’s denial of a pandemic threat. Under the leadership of its own Organizational Health and Safety team, it increased production of alcohol (a by-product of the sugar-making process) to supply medical facilities, and commissioned the production of 50 000 reusable masks. Community outreach was also a top priority; the company provided training in preventative measures to staff, farmers’ associations, schools, and communities at large.
Another FMO client, a Latin American coffee producer operating in a country without a state-led response to COVID-19, set up a foundation to spearhead an awareness campaign about the virus among workers, farmers and schools. They are preparing the distribution of movable sinks and disinfection packages throughout their community, together with an educational package to raise awareness on prevention and early response. These initiatives will reach 4 000 small farmers, 11 220 family members, 77 278 temporary workers and 4 769 children.
In contrast, India has experienced one of the world’s strictest lockdowns. These measures left little recourse for the country’s millions of wage workers, particularly those in the poorest provinces, who were unable to access essential goods and services
Indian impact investing pioneer Aavishkaar has established the Avishkaar Group Facility for Humane Action, with the aim of supporting government measures against COVID-19 while meeting the basic needs of those left socially and economically vulnerable.
The Facility, supported in part by a crowdfunding campaign, works by providing grants to local state organizations and carefully selected non-profit delivery partners, concentrated in regions that are historically underserved and facing the greatest socio-economic challenges during the pandemic. As these delivery partners distribute aid, the Facility stays in close contact to monitor their progress and assist them with operational challenges.
A shortage of Personal Protective Equipment (PPE), particularly for frontline workers at low-income and government hospitals, has also hampered India’s pandemic response. There are relatively few suppliers of these items within India, and prices tend to be high. The Facility’s second goal is to leverage its network to find affordable and reliable sources of PPE and ensure these are allocated where they are needed most.
Worldwide, the energy sector has been heavily impacted by COVID-19 response measures.
Frontier Energy is an investor in 40 renewable energy projects in Sub-Saharan Africa. Due to social distancing measures, construction work on a number of its projects has been delayed or placed on hold. The company’s operational projects are also compromised, as lockdown has led to a marked drop in electricity usage: by 16% in Kenya and 30% in Uganda.
In facing these challenges, Frontier has chosen to prioritize keeping workers on the payroll and supporting local communities. The company’s sub-contractors have laid off 300 casual workers, but Frontier is continuing to compensate them at 50% salary via mobile money. At the community level, Frontier plans to implement several short-term initiatives to ease the impact of COVID-19. It aims to support community projects relevant to the ongoing crisis, such as soap-making and mask-making initiatives. The company plans to offer support to local health care facilities, support income generation activities and provide stipends for basic supplies to the most vulnerable in the local communities. In the medium to long term, the company can contribute to alleviating the consequences of the crisis around its project sites, by supporting initiatives in agriculture (animal rearing schemes), education (bursaries), health (by supporting local clinics), water access and other income generation activities.
In addition to addressing the immediate impact of the crisis, some companies are looking ahead to a post-COVID world, considering how they might contribute to preventing the spread of future viruses.
In Georgia, Microfinance Organization Crystal, which supports micro-entrepreneurs and smallholder farmers, is entering a reimagining and strategic re-planning phase. Crystal’s new strategy focuses on greater digitalization of its operations, so as to decrease the need for physical interactions between employees and customers, and replacing cash transactions with mobile payment functionalities.
In Kyrgyzstan, Kompanion Bank has taken numerous steps to help combat the effects of the pandemic, including purchasing medical equipment for hospitals and spreading awareness in rural areas of the country. New lending programs are in place to help restart and maintain the liquidity of businesses. The Bank continues to operate in all regions and “hotspots” of the country so that people have uninterrupted access to their bank accounts. Currently, the Bank is actively working towards a full-scale renovation of its remote banking services and is taking efforts to integrate new solutions together with prominent banks in the CIS countries.