As a result of the COVID-19 pandemic, governments worldwide introduced various measures restricting the movement of people and goods, as well as non-essential economic activities. In April 2020, the repercussions of such restrictions were felt in Malawi, Zambia and Zimbabwe as economies suffered a severe downturn.
To formulate an appropriate response, MicroLoan asked the women we work with in Zambia and Malawi how COVID-19 had impacted them, and how we could help them to weather the storm. Our COVID-19 Impact Reports published in September 2020 showed that an overwhelming majority of clients in both Malawi and Zambia saw a negative financial impact on their lives. For example, when markets were closed, some women had no alternative way to sell their products. The pandemic caused additional widespread food insecurity and many women and their families are still going hungry.
MicroLoan was proactive in responding rapidly to support our beneficiaries, determined to help as many women’s businesses navigate the increasingly devastating economic climate in each country. We rescheduled loans, disbursed further loans and in some cases wrote off loans. At present, our Loan & Training Officers continue to support, train and mentor female entrepreneurs, whilst adhering to strict health and safety guidelines.
Undoubtedly, the everyday lives and livelihoods of MicroLoan’s female entrepreneurs have been hugely impacted by the pandemic. Restrictions on movement now mean that supply chains in each country are interrupted, which is detrimental to women who rely on imported stock or exporting goods. The pandemic has adversely affected trade, employment opportunities, access to capital, and demand for goods and services. Click here to read about how one female entrepreneur in Zambia, Lister Sialwindi, has managed to maintain her cosmetics business despite the restrictions on cross-border trade.
At the end of 2020, the new South African variant triggered a deeply concerning spike in reported cases of COVID-19 in Malawi, Zambia and Zimbabwe. The repercussions for each country are outlined below.
As of 1st February 2021, the World Health Organisation reported 23,497 confirmed cases of COVID-19 with 687 deaths. The economic repercussions have been equally devastating. As part of our COVID-19 survey published in September 2020, 100% of women in Malawi reported to be facing hunger at a time when they usually would not.
As the South African COVID-19 variant spreads, the situation is getting worse and Malawi is recording a much higher infection rate than when the pandemic began. On 23rd December 2020, Malawi closed all its land borders to non-residents until further notice. The Government has been emphasising preventative measures such as self-isolation when exposed or diagnosed with the virus, closing of schools, social distancing, compulsory wearing of face masks and testing when entering the country.
The MicroLoan team continue to follow government guidelines and staff in Malawi continue to take the necessary precautions to minimise the risk of spread, including providing sanitisers and masks to staff travelling into communities. Our Loan & Training Officers continue to meet women in locations where it is easy to remain socially distanced and the group sizes have been reduced from 15-20 women to five. The committee on COVID-19 was set-up to educate staff and beneficiaries on the dangers of the virus and its implications for our operations.
In light of the access challenges experienced during 2020, MicroLoan made the decision to accelerate the introduction of mobile money in September 2020. As of December 2020, we are conducting a pilot study in Lilongwe with telecommunications company Airtel to train our staff and women on a mobile money banking application. Mobile money is efficient, time-saving and COVID-19 safe, reducing the need for cash-handling and frequent face-to-face meetings.
Zambia is currently experiencing it’s highest rate of daily COVID-19 infections since the pandemic began. The World Health Organisation reports that, as of 1st February 2021, there have been 53,352 confirmed cases of COVID-19 with 745 deaths.
In September 2020, the government relaxed lockdown measures allowing businesses to operate under strict health guidelines. Many of MicroLoan Zambia’s female entrepreneurs were able to resume their businesses. Despite a spike in reported COVID-19 cases in Zambia at the end of 2020, businesses continue operating adhering to the guidelines. We are uncertain whether this is likely to change in the first months of 2021.
Mobile money is now used in almost 100% of our operations in Zambia, with the exception of some very remote, rural villages where it has not yet been possible.
MicroLoan Zambia has set up a COVID-19 committee to implement safeguards that will reduce the risk of staff and clients being exposed to the virus. The committee also focusses on raising awareness of the virus in rural communities, whilst ensuring that health guidelines are adhered to in all areas of operation.
The worsening economic climate in Zambia has been compounded by the COVID-19 crisis. The Zambian kwacha continued to rapidly depreciate in the final months of 2020.
The COVID-19 situation in Zimbabwe continues to deteriorate with the number of confirmed cumulative cases increasing by more than 70% in December. As of 1st February 2021, the World Health Organisation reports 33,271 confirmed cases of COVID-19 with 1,193 deaths in Zimbabwe.
Even before the start of the COVID-19 pandemic, Zimbabwe was experiencing a financial crisis and the Reserve Bank of Zimbabwe announced a number of macroeconomic measures to control inflation and the rapidly devaluating currency. One of these changes was restrictions to the EcoCash mobile money services which forced us to find an alternative solution to disburse money to our clients’ Ecocash accounts through a company called MyCash.
In September, the government eased most COVID-19 restrictions that limited the movement of people by increasing business hours, resuming long-distance inter-city and rural-urban transport services, and domestic tourism, among others. The reopening of national borders in early October increased informal cross-border trade, remittance flows, and labour opportunities improving income, especially in the informal sector and urban areas. 60-70% of women we work with in Zimbabwe rely on cross border trading and supply chains, so this was a very positive development. However the reduced restrictions were short-lived and on 6th January, the government reintroduced a 30-day lockdown due to the new strain of the virus detected in South Africa. This has seen the closure of most formal and informal businesses which are not categorised as essential services.