A Risk Management Framework for Microfinance Institutions
This book presents a framework for internal risk management systems and processes in microfinance institutions. The content is aimed at senior managers and directors of these institutions. The initial chapters provide an overview of comprehensive risk management as an approach and discuss the significant risks and challenges facing microfinance institutions today. They explain the MFIs should not discourage risk taking but encourage prudent risk taking.
The key components of an effective risk management framework are identified and explained. These include:
- identifying, assessing and prioritising risks
- developing strategies to measure risk
- designing operational policies and procedures to mitigate risk
- implementing procedures and assigning responsibilities
- evaluating results and revising procedures as necessary
The key concepts are illustrated with practical examples drawn from microfinance institutions around the world.