Women’s World Banking Network Engagement Manager Rebecca Ruf will teach a course on “Financial Management for MFIs” at this year’s Microfinance Training Program in Colombia. The six-year-old capacity building program hosted by the Boulder Institute of Microfinance on March 5-16th, 2012 brings together leaders of Latin American microfinance institutions (MFIs) to review best practices for the industry.
The financial management course will offer guidelines on how to build a strong financial risk structure based on toolkits developed by WWB with the support of Citi, CAF, and AECID in Financial Risk Management, and Cash Management and Liquidity. The course combines theory and practical exercises and group discussions. The last day will be a simulation of an ALCO Committee, where participants present their financial risks to the class.
Financial risk management is essential for MFIs, given their nature as financial institutions. Liquidity problems may jeopardize the viability of MFIs, especially for institutions that take deposits. Additionally, as MFIs become deposit-taking institutions, they are subject to more rigorous regulatory requirements and must ensure they have the appropriate financial and liquidity frameworks in place. Access to more sophisticated funding sources including commercial funding, capital markets, new savings products, and others requires that MFIs adapt formal institutional structures, policies, procedures and reports to manage their financial risks and protect their core business. WWB understands the industry’s increasing sophistication and supports institutions with the development of financial optimization toolkits to ensure that management has the practical tools and models available. WWB has been a pioneer in the industry in the area of financial risk management, developing the first Financial Risk Management Toolkit, with the support of Citi, in 2005 and has trained more than 336 practitioners, representing 126 MFIs from 57 countries.