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Financial risk is the risk of financial losses and negative social performance related to the maturity, currency, re-pricing, and concentration structure of an MFI’s assets and liabilities. As MFIs face product differentiation among loan assets and more choices in funding sources, it becomes increasingly important to manage these risks effectively. There are four subcategories of […]

Credit risk encompasses the risks related to an MFI’s credit activities. It is the most frequently addressed risk by MFIs since it directly affects their main earning asset: the loan portfolio. It includes the risk of financial loss resulting from the inability to collect anticipated interest earnings, or on capital resulting from loan default, as […]

Strategic Risk encompasses the risk of financial losses and negative social performance related to the strategic direction of the institution. Two subcategories have been identified within strategic risk: governance risk and strategic risk. Governance Risk – Governance risk is the risk of financial losses and negative social performance related to inadequate governance or poor governance structure. […]

The organizational foundation represents the basic organization structure that MFIs should have in place in order to effectively engage in formal risk management. Three components—governance and strategy, risk culture, and internal control and management information system (MIS)—make up the foundation. Each component plays a critical role in an MFI’s ability to adequately implement formal risk […]

Organizational Foundation To determine which tier an MFI belongs to, and therefore what degree of risk management is appropriate, the RMGM uses MicroRate’s globally accepted classification system as a starting point. The system is based on a three-tier structure that applies three simple, objective indicators that together act as proxies for an MFI’s level of […]

The RIM Graduation Model Encyclopedia is an exhaustive resource for understanding each guideline referenced in the Graduation Model framework. The Encyclopedia is designed to assist in the carrying out of an Institution Assessment—while also serving as an invaluable, easy-to-use and understand reference guide for various aspects of risk management. Microfinance Institution Tier Identification To determine […]

Internal / MFI Toolkit RIM has developed the Institution Assessment Toolkit for Internal Assessors as a step-by-step technical guide for assessors of microfinance institutions. This guide is divided into two sections: Overview Technical Guide The overview is written for board members and executives of microfinance institutions to provide an overview of RIM and the Graduation […]

Institution Assessor Directory The RIM Institution Assessor Directory is a public database of independent consultants who are trained in conducting the RIM Institution Assessment process with financial institutions. The Assessor Directory allows institutions within the microfinance industry to easily identify and contact available trained assessors to work with them to conduct an institution assessment. Disclaimer […]

Assessor / Consultant Toolkit RIM has developed the Graduation Model Assessment Toolkit as a step-by-step guide for the contracting party and the assessors implementing the Model’s assessment process within an MFI. This toolkit is divided into three distinct sections: 1. Overview2. Administrative Guide3. Technical Guide The Administrative Guide is aimed at Graduation Model assessors as […]

The RIM Graduation Model is a pathways-based, best practice standard for risk management in the microfinance sector. Through a diagnostic process, MFIs can assess their current risk management systems, structures, and capabilities against the RIM Graduation Model and determine their adherence to best practice risk management standards applicable to their institutional tier level. Through assessing […]