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Overcoming Covid-19 challenges in India [interview part 1]

Overcoming Covid-19 challenges in India [interview part 1]

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Gouri Sankar, the Managing Director of Oikocredit’s subsidiary in India (Maanaveeya)

Thursday 19 August 2021

India, the second most populous country in the world, has been hit incredibly hard by Covid-19. What is the situation like now? Has Oikocredit’s subsidiary in India (Maanaveeya) been able to cope? What about our staff and our partners and their clients? Gouri Sankar, Managing Director of Maanaveeya, answers these questions and more.

India just went through a second ‘wave’ of the pandemic. What has it been like since the pandemic first hit and what is the situation like now?

Unfortunately the second wave hit India really hard. This country has a very high population and lacks infrastructure. Covid-19 has not only destroyed many lives here, but it also has been hurting businesses, families and communities.

Things were of course difficult at the start of the pandemic in 2020 – the lockdown was long and hard – but things started to improve. People started to let their guard down, thinking the worst was over. Then in March 2021, the second wave hit. This was more serious than the first wave in terms of mortality. Fortunately, the lessons learned in first wave (social distancing, washing hands, government lockdowns, digital payments, e-commerce, etc.) helped us to manage the second, but we couldn’t prevent the serious damage that came with the Delta Variant.

Fortunately, things are improving – for everyone. Before it was only people in urban areas who were getting vaccinated, but now the most vulnerable, such as people in slums and rural areas, are also getting vaccinated and receiving government support. India has a huge population, so we have a long way to go on vaccinations, but the government is doing its best to ramp up the production and distribution to each of the states. Covid-19 cases are going down again; however, there is talk of a third wave that might strike in August. It looks like there will be a spike in numbers again but not as bad as the second wave.

How have our partners and their clients been affected by Covid-19? How has life changed for them?

The first wave was more in urban areas. During that time nobody knew what to do and how to handle it, so that was very difficult, but the mortality rates were low. Rural areas were less affected during the first wave, but when this new Delta Variant came along with the second wave, it spread everywhere. The mortality rate was especially high in rural areas because of the lack of access to good medical  infrastructure: they don’t have access to medical support or basic sanitation and hygiene supplies. The initial lack of vaccinations is also why the second wave hit rural areas so hard.

Because a lot of our microfinance institution (MFI) partners work in rural areas, you see that their clients were affected more in the second wave. Thankfully our partners learned how to manage the crisis from the first wave and knew how to support their clients through the second. Unfortunately, a lot of our partners’ members and their clients have been personally affected and this has been extremely difficult for all of us to see.

What are some of the biggest challenges Maanaveeya has faced during the pandemic?

Seeing Maanaveeya staff affected by Covid-19 during the second wave has been the most difficult aspect of the pandemic. Their health and well-being are my number one priority and Covid-19 has made this a scary and trying time. At the same time, the support that our team has had for one another is extremely encouraging to see. We’ve been working from home since March 2020 and are continuing to do so. Throughout the entire pandemic we have looked out for each other and offered support wherever we can.

From a business perspective it has been challenging because we see the economy affecting us. Everyone wants to remain cautious and keep their money tight in a crisis, which is understandable. We don’t see the supply side (the money that we want to invest) affected too much, but the demand side has. MFIs are hesitant to take out and offer loans, especially because a lot of people have not been able to do business during a lockdown. Thankfully things are improving in India and the demand side is picking up again as the country and its people recover. In the meantime, we have been supporting our partners so that they can help their clients get through this difficult time.

How are the effects of the pandemic affecting our work in India?

Last year, in 2020, we were very careful and hesitant in doing business, especially from April to August when we were in a nationwide lockdown. This is also when we experienced the after effects of the first wave, in the form of difficult recoveries for MFIs. We didn’t onboard any new partners until October 2020. Instead we focused on supporting our current partners and our staff through the pandemic while slowly making a selection of which partners we planned to onboard.

Things were looking a lot better after the first wave, so in September we were able to cautiously continue business – and even grew our business! The second wave has definitely been a harder hit in terms of mortality, but this time the lockdowns are shorter, going per state and do not last as long, so it’s been a lot easier for our partners to get back to business and for us to support our partners.

Right now we are focusing on our current clients again and have a list of who we want to onboard in the near future. But we first need to make sure that we are able to continue to support our current partners as best as possible and remain cautious as there is talk of a third wave in August. So we are not back to ‘normal’ yet, but we are positive and cautiously optimistic, especially now that the country has managed to get through two waves already and gained sufficient experience to deal with its effects.

Despite all that has happened, we are proud that Maanaveeya’s portfolio quality is good and we and that we – along with our partners – are recovering well. Things are still difficult in India, but we are better prepared and have a very good  understanding of how to tackle various challenges that arise.

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