RIM’s collaborative model provides the option for the best practices, creation of higher standards and global promotion of microfinance risk management.
This collaborative approach provides the following:
- A unique mix of founding members (thought leadership to technical implementers)
- Wide reaching networks (through MIV investment portfolios, existing TA program, etc.)
- Years of knowledge build up and lessons learned
- Rich experience in bringing together industry stakeholders to solve sector-wide problems (SMART Campaign, MFX Solutions, Council of Microfinance Equity Funds (CMEF), European/African Microfinance Week)
- Proven track record in industry thought leadership
RIM’s Risk Management Graduation Model will provide the following value to the sector:
Reduced barriers for implementation of risk management
- Better understood risk management standards for MFIs at all tier levels
- Well-defined risk management gap analysis
- Lower implementation cost
- Forward-looking visibility on MFI risk management needs
- Ability to create proactive risk management development plan
- Enables ownership of risk management by MFI board and senior management
- MFI confidence and willingness to engage in risk management increased
- Develops incentives for continuous improvement
Scalable, double bottom line focused, best practice risk management standards
- Integrated risk management approach
- Includes social and financial elements of risk management
- Based on decades of microfinance risk management experience and industry input
- Flexible guidelines for different institutional tier levels
More efficient use of financial and human resources
- Reduces excess waste of donor and MFI funds through decrease of duplicated efforts and poorly performing capacity building projects
- Focuses MFI financial and human resources on strategic priorities
- Incorporates risk management into the strategic planning process
…most MFIs are faced with serious problems installing internal control systems, and they have no measures of assessing the institutional and business risks that are inherent in their operations.
…there is still a weak understanding among all of the staff of financial institutions of what integrated risk management is all about.
Many MFIs engage in risk management efforts due in part to pressures they face from regulators or investors rather than from a deep appreciation of risk management and the social and financial value it can bring to an institution.