It's been five years since the world shut down. Five years since "unprecedented times" became our daily reality. The money lending business was never the same after March 2020, and if you're still standing today, you've learned some brutal lessons.
Here's what survived the crucible.
The Fragility of Income Streams
Pre-COVID, we assessed income reliability based on job stability and business track records. COVID taught us that "stable income" is an illusion. Government lockdowns evaporated income streams overnight. Salaried employees at "secure" companies found themselves jobless within weeks. Small businesses that had operated for decades closed permanently.
The lesson: Income source diversity matters more than income source stability. A borrower with three modest income streams survived better than one with a single "reliable" salary. The gig economy workers we once considered risky proved more resilient than formal sector employees. They adapted faster, found new hustles, pivoted to survival mode.
Now when I assess borrowers, I don't just ask "what do you do?" I ask "what else can you do if that stops tomorrow?"
The Collateral Collapse
Physical assets lost value catastrophically during lockdowns. Commercial property became worthless when businesses closed. Vehicles depreciated faster than loan principals when nobody was driving. Household items we once accepted as security became impossible to liquidate - nobody was buying when everyone was selling to survive.
The only collateral that held value: land in specific locations, gold, and surprisingly, mobile money transaction history.
The lesson: Collateral is only as valuable as the market's ability to absorb it during a crisis. We learned to accept smaller loan amounts relative to collateral value, or to demand more liquid forms of security.
More importantly, we learned that transaction history became the new collateral. A borrower's mobile money records showing consistent incoming and outgoing flows proved more valuable than physical items gathering dust in a locked shop.
The Integrity Test
COVID separated the wheat from the chaff in ways no normal economic cycle could. The true character of borrowers revealed itself under pressure.
Some borrowers who lost everything still communicated honestly, kept us informed, and paid back whatever they could when they could. Others who still had capacity disappeared, blocked our calls, and invented elaborate excuses while we later discovered they were operating as usual.
The surprising discovery: Some of our "vampire" borrowers - those running multiple concurrent loans - proved more reliable than our "principled" borrowers. Why? The vampires understood that burning a lender meant losing future access to credit. They needed the relationship to continue. The principled borrowers who only borrowed occasionally felt less stake in maintaining the relationship.
The lesson: Character isn't revealed in good times. It's revealed when paying you back conflicts with immediate survival. The borrowers who stayed in communication during their worst moments are now our most valued clients.
The Death of Fixed Payment Schedules
Pre-COVID, we operated on rigid payment schedules. Monthly payments due on specific dates. This broke completely when income became irregular and unpredictable.
The lesson: Flexibility became survival. We learned to negotiate payment plans that matched irregular income flows. Daily micro-payments through mobile money. Payments tied to specific income events rather than calendar dates. The borrowers who survived were those whose lenders adapted payment structures to economic reality.
The rigid lenders lost everything trying to enforce pre-COVID terms in a post-COVID world.
The Regulatory Chaos
Governments responded to COVID with contradictory policies. Interest rate caps that made lending uneconomical. Eviction moratoria that eliminated our ability to recover collateral. Debt forgiveness programs that encouraged borrowers to default strategically.
The lesson: Political risk now exceeds credit risk in many markets. We learned to maintain lower loan volumes and higher liquidity ratios. Better to have capital idle than trapped in loans we legally cannot collect because a politician decided to buy votes with debt forgiveness.
The Technology Acceleration
COVID forced everyone online. Mobile money penetration exploded. Digital record-keeping became essential when face-to-face meetings stopped.
The lesson: Borrowers with digital footprints became assessable in ways impossible before. We could verify income through mobile money statements, track spending patterns, assess business viability through online presence. The analog borrowers became increasingly risky - not because of their character, but because we couldn't verify anything about them.
The New Borrower Types
COVID created new categories:
The COVID Casualties: Lost everything and never recovered. Dead capital sources. Write them off and move on.
The COVID Survivors: Barely hanging on, perpetually restructuring. High maintenance but might eventually recover. Requires judgment on whether to support or exit.
The COVID Thrivers: Found opportunities in chaos. New businesses, new income streams, adapted faster than the market. These became our new cash cows - but with caution, because rapid success can reverse just as quickly.
The COVID Opportunists: Took advantage of debt forgiveness programs, eviction moratoria, and lender desperation. Borrowed knowing they wouldn't pay back. Our new charlatans, but wearing masks of victimhood.
The Capital Preservation Imperative
Many lenders went under not from defaults but from being unable to collect performing loans during lockdowns. Capital was there but inaccessible.
The lesson: Liquidity buffers must be larger than we ever thought necessary. The old ratios don't work. We now operate with 30-40% idle capital just to survive the next shock. This makes us less profitable in normal times but ensures survival in abnormal times.
And we've learned that abnormal is the new normal.
What Works Now
Five years post-COVID, here's what actually works:
- Smaller loan sizes relative to income and collateral
- Shorter loan terms - 3 months maximum for new borrowers
- Digital verification of everything verifiable
- Flexible payment structures tied to actual cash flows
- Premium pricing for the increased risk we're absorbing
- Ruthless early action on warning signs
- Maintained relationships with performing borrowers even when they don't need loans
What Doesn't Work Anymore
- Lending to single-income-source borrowers regardless of that income's "stability"
- Accepting physical inventory or commercial property as primary collateral
- Fixed payment schedules
- Long-term loans to anyone without multi-year track record
- Lending to borrowers without digital transaction history
- Trusting government promises about regulatory stability
- Maintaining high deployment ratios of available capital
The Philosophical Shift
The biggest lesson isn't operational - it's philosophical. Pre-COVID, we operated with the assumption that economic systems were fundamentally stable with occasional disruptions. Post-COVID, we operate with the assumption that disruption is constant and stability is temporary.
This changes everything about how we assess risk, structure loans, price credit, and choose borrowers.
The money lenders who survived COVID weren't necessarily the most skilled or the most capitalized. They were the most adaptable. They were willing to abandon practices that worked for decades when those practices stopped working overnight.
In 2025, adaptability is the only sustainable competitive advantage.
The game hasn't just changed. The rules no longer apply. And the borrowers who understand this are the ones we want to work with.
Because when the next disruption comes - and it will come - we'll need borrowers who can adapt as fast as we've learned to.
Stay flexible. Stay liquid. Stay alive.
