Projects

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  Effective Management of Non-Performing Advances for Arthavida Foundation

  The Sri Lanka based MFI, Arthavida Foundation (AvF), a sister concern of Arthacharya Foundation (AF), approached MicroSave seeking consulting to improve its portfolio quality. Until 30th June 2011, AF was engaged in both microfinance and non - microfinance activities. In June 2009, the PAR (>30days) of AF stood at an alarming 24%, which further rose to 40% by June 2010. The active loan clients and loan portfolio outstanding had also gone down. AF decided to transfer its microfinance operations to AvF on July 1, 2011. However, AVF faced severe challenges of improving portfolio quality. Rabobank Foundation, commissioned MicroSave to offered the technical support in 2009.

   

  On account of the technical assistance and proactive implementation by AvF, amongst several efficiency and productivity gains, the PAR (>30 days) was systematically reduced from 40% to 5%, within a short period of two years. This case study covers the challenges of AF and how a tripartite approach of intense engagement of a donor/investor, financial service provider and MicroSave came together to successfully address the problem of delinquency. Read the case study here.

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  Development of Risk Management Guidelines for Credit Unions in Kenya

  MicroSave was commissioned to develop regulatory guidelines and supervisory framework for Sacco Societies Regulatory Authority (SASRA) to issue to regulated deposit taking SACCOs in developing and implementing SACCO enterprises risk management frameworks. The guidelines covered governance, strategic, credit, operational, liquidity, interest rate, compliance and business continuity risks. MicroSave team was responsible for: reviewing risk management guidelines issued by Central Bank of Kenya for banks, and risk management guidelines issued in other national jurisdictions for banks and non-bank financial institutions and determining aspects to adapt for the Kenyan Saccos (credit unions); conducting onsite surveys with large, medium and small sized Saccos to determine the differentiated risk management structures and practices for the risk management guidelines; prepare initial draft guidelines on risk governance and structures and the  management strategic, credit, operational risk management, liquidity, interest rate, foreign exchange, and  compliance risks; discuss review points on each section of the draft risk management guidelines with SASRA’s institutional supervision technical team; revising and finalising the risk management guidelines based on comments received from SASRA and the regulated credit unions.

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  Risk Management System Development at Wisdom Microfinance

  Wisdom Micro Financing Institution (S.C.) is a World Vision affiliated microfinance institution established in 1998 to provide financial service to micro-entrepreneurs and small-holding farmers in Ethiopia. MicroSave was contracted to develop risk management systems for Wisdom. As part of the assignment, MicroSave team developed a risk management matrix for use by the organisation. Subsequently, Wisdom decided to integrate the risk management policies in their policy documents as a part of overall management function. Further, specific risk owners were identified for each department to monitor and address the risks identified for that department. For every risk, monitoring indicators, reports, and threshold level of those indicators were also defined to regularly monitor changes in risk profile of Wisdom. A Risk Management Manual was prepared which was submitted to, and accepted by, the Central Bank of Ethiopia as their policy document on risk management.

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  Risks Management Trainings – Standard Chartered Bank

  In view of the status and challenges of microfinance industry, Standard Chartered Bank contracted MicroSave in the past to develop a Risk Management Toolkit- covering credit, operational, market, financial and strategic risks.  As part of the project risk management workshops were conducted for partner MFIs and banks in Bangladesh, Indonesia and Nepal. The senior management of these MFIs attended these workshops. The workshop covered strategic risk management framework for risk management and covered risk management strategies for different types of risks faced by the MFIs and banks. As a part of the technical assistance programme around 150 senior management staff from the three countries were trained in risk management practices.

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  Risk and Customer Protection in Digital Financial Services study - CGAP

  CGAP hired MicroSave to investigate emerging consumer risk (fraud, data privacy and protection, etc.) in the provision of digital financial services through anin-depth research projectin three countries (Bangladesh, Philippines & Uganda). We selected these markets for regional diversity, regulatory approach, business models, etc. which allowed us to assess risk and customer protection issues in different environments and digital eco-systems. We also looked at conditions in markets where digital financial service models have been in place for sufficient time and have reached a scale to allow us to examine the evolution of risks and fraud over time. This research was conducted to build the evidence base of different consumer risks and their consequences for better client protection.
  The project covered both desk and in-country research (demand-side surveys/focus groups of consumers, collection of supply-side data evidence and insights) on the digital financial services on offer, the branchless banking eco-system, and the regulatory environment. Stand-alone case studies of the three markets were presented to help identify key findings and conclusions that can be drawn from available evidence on current/future practices. A synthesis document, pulling together findings and recommendations from the country reports and other markets analysed by our team, presented a framework for risks and cost-effective solutions, and recommendations on actions for CGAP and different stakeholders. The report was presented at the Responsible Digital Finance workshop at the Global Partnership for Financial Inclusion conference.

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  Risk Management for Indian MFIs - IFC

  IFC engaged MicroSave to scale up an existing Risk Management project, consolidating learning from an earlier project and offer a standard suite of services to MFIs for developing their risk frameworks. MicroSave team conducted a detailed risk assessment and diagnostic study of the selected MFI: Sonata, one of the largest microfinance providers in India using the IFC risk framework. This was supplementedby the use of our Rapid Institutional Assessment and Risk Management for Microfinance toolkits. Based on the assessments, a risk management implementation plan was delivered to the MFI. The plan indicated priority levels of each activity, corresponding timelines, monitoring parameters and commitment from MFI on resource allocation. To institutionalise risk management practices, we supported the MFI in implementation of risk management policies and risk governance structure. Eventually, based on the risks identified the team designed appropriated risk monitoring tools such as operational, credit and financial risk tools.