The Investing in Inclusive Finance program area focuses largely on risk industry initiatives. These risk initiatives include but are not limited to:
The objective of the Running with Risk project is to create a common framework and language so that MFI board members can better execute their roles in managing risk. Through research, exchange and the development of publications with industry players, Running with Risk aims to contribute to a more productive boardroom dialogue about risk. Ultimately, a stronger, more effective board presence related to risk mitigation will improve the health of MFIs around the world. The Running with Risk project has developed and published Microfinance- a Risky Business, Ten Risk Questions for Every MFI Board, and the Governing Banks Manual: Microfinance Edition.
Microfinance Banana Skins
The Microfinance Banana Skins publication is a yearly report reflecting perceptions of risk in microfinance by members of the microfinance industry. The report aims to reveal shifts in risk perception and to highlight both emerging and long-term risks in a rapidly changing field.
The CFI is sponsoring the Microfinance Banana Skins survey for 2014 in collaboration with Citi, CGAP and Centre for the Study of Financial Innovation (CSFI). The survey explores the risks facing the financial inclusion industry in the context of challenges such as growth, changing economic environments and an expanding product range.
In the 2014 edition, two-thirds ranked overindebtedness as their top concern – a persistent issue given that it was also the top concern in the Banana Skins 2012 Survey. The survey also reveals strong concern about the ability of microfinance providers to meet the strategic challenges facing the industry in areas such as client management, new products and technological change.Respondents' comments showed that overindebtedness is seen as a symptom of deeper weaknesses in the industry, for example in micro-lenders' governance and management, internal controls, and awareness of clients’ financial needs and capacities. Seven of the top 10 risks identified by the survey relate to the ability of microfinance institutions (MFIs) to manage a sound and growing business.
The Center for Financial Inclusion at Accion is sponsoring the Microfinance Banana Skins survey for 2014 in collaboration with Citi, CGAP and Centre for the Study of Financial Innovation (CSFI). The survey has been expanded to explore the risks facing the greater financial inclusion industry in the context of challenges such as growth, changing economic environments and a growing product range.
Past Microfinance Banana Skins surveys:
2014: Facing Reality
2012: Staying Relevant
2011: Losing its Fairy Dust
2009: Confronting Crisis and Change
2008: Risk in a Booming Industry
Risk management Initiative in Microfinance (RIM)
Through the collaboration of industry thought leaders, this initiative focuses on the design and use of risk management strategies to serve the microfinance sector. The mission of RIM is to contribute to the development of awareness, best practices, and appropriate standards for risk management in microfinance globally. RIM’s vision is to contribute to a socially-focused microfinance sector through which microfinance clients are protected from the impacts of internal and external risks inherent to the delivery of inclusive financial services.
