MAY 17 2013
WATERLOO, ON - MEDA recently co-founded an exciting initiative to bring risk management in microfinance to the next level together with Appui au Développement Autonome (ADA), Calmeadow, Center for Financial Inclusion at Accion (CFI), MFX Solutions, Oikocredit, REGMIFA, and Triple Jump. The Risk Management Initiative for Microfinance (RIM) aims to contribute to the development of awareness, best practices, and appropriate standards for risk management in microfinance globally.
In recent years, the microfinance sector has experienced the effects of poor risk management in a variety of different forms – from saturation in India, to local currency depreciation and unnecessary foreign exchange losses in Kenya, and from an uncertain regulatory environment in Kosovo to failed corporate governance in Liberia. The lack of a comprehensive approach to risk management has led many microfinance institutions to create static, ad hoc systems and approaches to risk management that are often reactive in nature. Rarely do these approaches feed into a larger risk management framework giving institutions the ability to adapt their systems, structures, policies, and tools to the changing business environment in which they operate.
The mission of RIM is to contribute to the development of awareness, best practices, and appropriate standards for risk management in microfinance globally. The Initiative'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. The newly established RIM will raise awareness through advocacy and visibility efforts about the importance of risk management in order to contribute to industry-wide standards and best practices for risk management, foster information and idea sharing between technical experts of microfinance risk management, and develop the capacity of risk management consultants in the field.
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MEDA is an international NGO founded in 1953 that provides technical expertise in subsector and value chain analysis, market linkages, financial services (rural finance, deposit mobilization and youth & financial services), health systems, and financial institution capacity development. MEDA's expertise cuts across sectors, working with vulnerable and underserved populations like youth, low-income women, and rural populations.