The note provides a practical approach, based on COSO framework, for small/ medium MFIs to put in place an effective internal control system. The functional areas that internal audit and control cover like: financial transactions, operations, adherence to mission, have a direct relationship with different types of risks for an MFI. For small and medium MFIs, managing these risks become more complex as systems are still evolving, processes are individual driven, procedures are sidelined, they face human resource constraints and affordability issues etc. It advocates that it is essential to have system of sound internal audit and control at every stage of institutional growth, though setting up such a system may appear complex and costly. There are innovative and cost effective ways though which such a system could be built based on the elements of proper internal control and ownership at all levels within the organisation.
Blog
Provisioning for Loan Impairment in MFIs
Maintaining adequate reserves to cushion against future loan losses has again been highlighted in the wake of recent financial crisis. This India Focus Note delves into the importance of this for the microfinance sector, highlights current challenges, and possible ways forward in provisioning for loan losses for Indian MFIs.
Village Financial Systems in Northeast India
Villagers in Lower Assam are pioneers on the frontiers of informal finance, according to the results of recent field work conducted by the Indian Institute of Bank Management. This note provides an overview of the village financial systems in Northeast India, highlighting the flexibility and the multiple needs met by these Accumulating Savings and Credit Associations (ASCA).
M PESA Kenya
In this video, Nick Hughes, Head of International Mobile Payment Solutions, Vodafone Group, talks about their product M-Pesa in Kenya- a mobile payment service which allows customers with a prepaid phone to move money between accounts. Vodafone has promoted M-Pesa as a mobile payment service that is quick, convenient and secure. He further explains the simple process in which M-Pesa works. Talking about Vodafone’s expansion plan in other parts of the world, Nick enlists the reasons behind the success of M-Pesa.
Institutional Culture and Transformation: From NGOs to Market-led MFIs
The transformation of microfinance NGOs into a more regulated legal form is seen as one of the most effective strategies for achieving scale and sustainability. However, transformation requires a significant change in institutional culture, affecting stakeholders at all levels – from clients and field staff to managers and board members. This note focuses on the experiences of Indian NGO-MFIs, and looks at what to expect and how to manage the institutional culture shift that accompanies transformation.
Client Protection Campaign The Role Of Funders And Governments
In this video, Kate McKee, Senior Advisor, CGAP, taking the discussion further on Client Protection Campaign enlists the role of funders and government towards creating healthy environment for the customers. Explaining the role donors and investors, Kate says that funders must set the right incentives and support providers to put better policies into practice. While talking about the role of the government, Kate says government regulation and involvement in client protection is very complex.