Responding to COVID-19 in emerging economies: lessons from the financial sector

By Mauricio Rosillo, Corporate Vice president, Grupo Bancolombia


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.
This blog is also a part of a thread looking more specifically at the role of private sector actors in responding to the impacts of the COVID-19 crisis in developing countries.


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COVID-19 is plunging the world economy in the most severe crisis of recent times and threatens hard-won gains in terms of poverty reduction, food security and economic empowerment. What can the private sector, and in particular the financial sector, do to protect and advance sustainable development and well-being for all?

Governments, companies and citizens must quickly adapt to shoulder this unprecedented situation. This is particularly the case in emerging and developing economies where socio-economic vulnerabilities are higher and state capacity is sometimes low. Consequently, support from other socio-economic actors, notably large firms, is even more necessary.

The immediate priority is to protect people’s health and income. This crisis, together with public health measures such as social distancing and restrictions to mobility, is changing daily routines for workers and firms and reducing their ability to generate income. Latin American economies are not immune to these effects. The high levels of informality and vulnerable Micro, Small & Medium Enterprises (MSMEs) make the policy responses more complex. Coordination and coherence across different actors is fundamental to halt the pandemic, minimise the negative socio-economic consequences and put the economy on a strong and sustainable development path.

Companies are faced with the twin challenge of maintaining their operations when needed, being responsible towards their employees, customers and other stakeholders, and providing solutions for the society as a whole. Banks, for instance, have a tremendous responsibility towards savers, customers, employees and investors, but also to ensure money keeps flowing through the economy.

Here are some considerations from the experience and recent measures we have taken at Bancolombia that could be useful for other firms, particularly banks, in emerging and developing economies.

Workers’ health comes first – equip yourself accordingly. As banking is considered a basic service to ensure financial transactions remain available for households and firms during the crisis, at least part of our operations need to be maintained. Since staying at home is the best response to limit the spread of the virus, teleworking measures should be adopted by large firms for workers not involved in critical processes and adequate protection given to those who are. In Colombia, 19,500 of Bancolombia’s 22,000 employees are working remotely. For those remaining in branches, we adjusted their schedules and workstations to minimise risks of contagion, while ensuring service to clients. The same measures were applied in the other countries where Bancolombia is operating: El Salvador, Guatemala and Panama, in accordance with local regulations and the recommendations of the World Health Organisation. There, more than 3,000 workers are in home office.

Key takeaways:

  • Respond efficiently and quickly to limit the spread of COVID-19 among employees and beyond by promoting – even before government announcements – teleworking activities as much as possible.
  • Coordinate and take into account local and international standards.
  • Guarantee minimum operations to households and firms as financial transactions are one of the basic services that should be maintained.


Exceptional times require innovative responses – provide people and firms with the solutions they need to overcome these difficult times.
Indispensable public health measures will inevitably cause socio-economic damage to households and firms, and uncertainty remains about how long the pandemic will last. We have put several measures in force to help customers, including temporarily freezing mortgage payments and consumer loans. Additionally, households can extend their credit card and mortgage payment deadlines. For individuals who have lost their jobs, we keep the benefits we offer for salary accounts. Also, credit card interest rates have been reduced for purchasing food, medicine and medical services. Over 1.4 million Colombian families stand to benefit from these measures.

To help companies protect jobs and maintain cash flow, we are providing new credit lines with benefits for SMEs, self-employed workers and corporates. This is particularly relevant for vulnerable firms in need of financial support to avoid bankruptcy, which would amplify the crisis. Each customer requires specific tailor-made solutions. In El Salvador, Banco Agrícola – Bancolombia’s subsidiary – is providing personalised advice to retail customers, SMEs and corporates.

Key takeaways:

  • Private banks need to support vulnerable households and firms to avoid widespread unemployment and poverty. This is particularly relevant in countries where fiscal space is limited and most of the public financial support goes to the poorest.
  • Several financial measures must be taken including credit payment deferrals, extraordinary credit lines and interest rate cuts. These measures should benefit those who need it the most.


The battle is won together – this is not the time to work in isolation.
People must keep their distance, but companies should work together. As a customer, Bancolombia is paying its suppliers earlier (logistics, cleaning services, surveillance companies, cash in transit services, etc.), starting with small businesses. Supporting those companies, which employ over 10,000 workers, should contribute to keep jobs and cash flow for their activities.

More than ever, it is important to form alliances with other firms to help the poor and vulnerable population. Bancolombia is working with other companies to strengthen food banks and ensure that fresh food is reaching the 2 million vulnerable families in the country. These partnerships should also promote research and development in the health system. Together with ANDI – National Business Association of Colombia and the Centre of Innovation Ruta N in Medellin, we have provided seed capital to develop 10,000 ventilators, 100% made in Colombia. This is a unique moment to show the ability of government, companies, citizens and international actors to act together to provide solutions in extraordinary circumstances, whilst keeping a long-term vision of achieving health and prosperity for all.

Key takeaways:

  • Large firms have the capacity to support their suppliers, in particular the smallest ones.
  • Private alliances are possible to develop local solutions to social problems.
  • More than ever, never go it alone. Coordination, common sense and solidarity are the best ingredients to face this crisis.


The long term begins now – start now to engineer a sustainable recovery.
Looking beyond the immediate emergency response, private sector and public institutions must open a dialogue and act together, to strengthen the resilience of our economic and financial systems and make sure the recovery from this crisis will be strong and sustainable. The active and innovative role of the government and the Central Bank is crucial to navigate these circumstances.

The banking system in Latin America learned the lessons from previous crashes. In the last decades, Colombian banks have accumulated enough capital, above what is required by authorities. At the same time, financial institutions have reached high levels of liquidity due to a large base of customer deposits. Furthermore, the Colombian Central Bank has been providing liquidity to the financial markets since the earliest days of the economic emergency and cut its benchmark interest rate from 4.25% to 3,75%. The banking system in Colombia is ready to support the needs of people and companies in terms of liquidity and longer payment periods in the short term. And will provide funds in its capacity to resume the activities that will drive the economic recovery and thus, well-being for people.

The long term begins now, we need to start thinking about the post-COVID world and not waste this opportunity to build the foundations of stronger, more inclusive and sustainable development.