Proactive Risk Management: Lessons for Microfinance Institutions

by Lynn Pikholz and Pamela Champagne
Feb 3, 2004
1 min

This note discusses the role of proactive risk management as an essential element to the long-term sustainability of a microfinance institution.

This note discusses the role of proactive risk management as an essential element to the long-term sustainability of a microfinance institution, which helps in early warning system for potential problems, efficient use of capital, and successful new product development and rollout. It also provides lessons relating to required organisational change, risk management feedback loop, importance of periodic risk management reviews, unforeseen events, counterparty risks, risks related to human resources, and suitable product development risks.