There is a limited understanding of how access to formal financial services may have helped vulnerable populations cope with the economic effects of the COVID-19 pandemic. Did formal savings help families cope with interruptions in employment? And, did digital remittances help mitigate the financial shocks of the pandemic? In Nicaragua, researchers leveraged an existing randomized evaluation—aimed at improving the productivity of the self-employed rural population—combined with bank administrative data to answer those questions.

Expanding credit access to small- and medium-sized agricultural producers is an important policy challenge, given the millions of livelihoods affected along its supply chain. Researchers used data on loans to coffee processors across 24 developing countries to study credit and insurance constraints in the coffee sector and assessed whether relationships between lenders and coffee mills could mitigate strategic default. Results show that strategic default is a pervasive problem in this market and that business relationship can significantly mitigate the consequences of the possibility of default. The data also suggests that both credit and insurance availability are a significant constraint even to relatively large firms, like coffee producers and exporters.