Money, survival, and crisis: What COVID-19 taught us

Claudia McKay is the lead of green and resilient outcomes at CGAP, a global partnership working to expand financial inclusion 

It has been five years since the world faced one of its greatest resilience tests: the COVID-19 pandemic. The crisis spared no one, but hit the world’s poorest the hardest. Millions of low-income workers -mostly in the informal economy - saw their jobs vanish overnight. Many had no safe place to quarantine, no savings, and no access to basic services like healthcare.  

The pandemic underscored how financial services – savings, insurance, and digital payments - can determine whether a household rides out a crisis or falls into hardship. Today, as economic shocks, geopolitical tensions, and climate threats grow more interconnected, the question is are we doing enough to ensure financial inclusion for all?

In the face of a life-or-death crisis, financial matters may seem secondary. But for low-income households, the economic shock of COVID-19 was both immediate and devastating. Without safety nets, workers who fell ill or lost demand for their services had no cushion, loan repayments fell into arrears, and access to credit became more precarious.  

Bébé Agbodoglo sells homemade palm liquor, known as sodabi, in Togo, and like many merchants, she saw a significant drop in sales at the height of the COVID-19 pandemic. Through a TV broadcast Bébé learned about Togo’s NOVISSI social protection programme, which offers monthly government transfers of around $20 to informal workers. She followed the instructions on TV and within days received the first transfer to her mobile money account. Bébé credits this support to helping her meet her children’s basic needs during the crisis.

Many governments around the world turned to digital government-to-person payments to make sure people like Bébé could stay home safely but still pay bills. According to the World Bank, around 760 million people received such payments during the pandemic, with 80 million women opening their first account to receive them. 

Evidence from around the world confirms that financial services play a critical role in bolstering resilience for individuals and small businesses. For instance, mobile money users in Burkina Faso are more likely to save for unpredictable events, while in Mozambique, households with access to mobile money are significantly more likely to receive remittances after floods. 

Our research on how inclusive finance helped people weather the pandemic points to four lessons for empowering them to withstand the next crisis:

• Strengthen payment ecosystems for rapid crisis response: Countries with strong government-to-person payment systems moved quickly during the pandemic, delivering cash into the hands of individuals and small businesses in need. Chile, India, and Thailand, for example, leveraged digital ID systems to identify eligible citizens and deposit funds directly into their accounts. 
• Use social protection systems as catalysts for resilience: Delivering cash transfers to households and small businesses during economic shocks prevents them resorting to negative coping strategies like selling assets or taking on high-interest debt. Cash transfers also provide entry points to financial tools like savings, credit, and insurance, which help households and businesses adapt to future risks. In developing economies, nearly two-thirds of adults who received digital payments used their accounts for cash management, while 40% saved and another 40% borrowed. These financial inflows have long-term benefits, enabling families to invest in education and entrepreneurs to grow their businesses.
• Close gender gaps in financial services: In many developing countries, the vast majority of women in paid jobs work informally - 95% in Asia and 89% in Sub-Saharan Africa - leaving them and their families highly vulnerable to market disruptions. Policymakers should expand access to tailored financial services, integrate gender-responsive social protection programmes, and ensure women are included in economic recovery efforts. 
• Strengthen consumer protection: During the pandemic, financial scams surged and those newly connected to digital finance were often most at risk. Policymakers need to focus on strong consumer protection measures, like preventing fraud and promoting responsible lending. 

As we mark five years since COVID-19, what will it take to ensure financial inclusion plays a central role in future crises? Today, 1.4 billion people still lack a basic account, many of whom are women, and 345 million micro-enterprises in emerging markets remain informal, leaving them dangerously exposed to financial shocks. 

The pandemic showed that financial services can mean the difference between resilience and ruin. Yet too many remain excluded. The next crisis is not a matter of if, but when. We cannot afford to wait.