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“Alice” built a microfinance organization in Lagos, lending to small businesses that couldn't access bank credit. She had repayment rates above 90%, a leadership team that was the envy of the sector.
Then June 2023 arrived and the Nigerian government floated the naira. In a single day, the currency lost 25% of its value. By January 2024, it had fallen from ₦450 to ₦1,600 to the dollar. Inflation hit 35%.
Her borrowers' costs tripled.
When her funders reviewed the portfolio that year, they saw that repayment rates had slipped. The foundation’s program officer who championed her had to defend the investment in a board meeting — using a scorecard designed for a stable operating environment.
The organization was still standing, which in itself was incredible. It was also still the best option for the businesses in its network. But the funder’s evaluation framework had no box for “currency lost half its value in twelve months”.
This is the invisible penalty organizations in complex markets pay: An organization that should have earned deeper trust from its funders that year — for doing the hardest thing in the hardest conditions — instead had to spend energy justifying its existence.
If you fund or support organizations in volatile environments, it’s worth asking: are your evaluation frameworks measuring performance — or merely measuring stability?
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