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Since we are fully aware of the importance of transparency within MFIs, we have participated in the creation of the AMT (African Microfinance Transparency Forum), an association which is dedicated to the promotion of the transparency of African MFIs. Any interested African MFI may become a member of AMT by applying for membership on the AMT website.
By strengthening its governance skills, a microfinance institution is able to exercise control over all of the strategic and operational dimensions of its activities. Good governance prevents crises, provides a greater balance in the sharing of power and protects the long-term health of an MFI.
The governance of an MFI establishes all of the processes, decisions and regulations which are designed to frame, manage, administer and control the activities of an MFI. Governance also defines the way in which relationships are managed between an MFI’s numerous stakeholders: investors, board members, managers, employees, clients, etc., whilst mediating between their respective interests. Such a definition is a significant statement of a strong and responsible form of governance!
An MFI which provides transparent information creates trust and strengthens its legitimacy in the eyes of its employees and its external partners.
An MFI’s transparency is determined according to the accessibility of its financial and institutional information and its communication with individuals and relevant bodies. By both knowing and applying good transparency practices, an MFI can ensure that its stakeholders receive and understand all of the information they require in order to operate smoothly.
Transparency is acquired through different stages and actors. It requires, for example, the collection of reliable information, the performance of internal and external audits, the inspection of financial results by supervisors or the compliance with the principles of client protection.
The governance (self)-assessment and rating tool enables an MFI to assess its current level of performance with regards to governance and to establish a plan to correct the aspects which are not functioning correctly and/or to reinforce its strengths. It is available in English, Spanish and French.
This governance rating tool has been developed by PROMIFIN, a programme which is supported by Swiss cooperation in Latin America and is implemented by Triodos Facet.
We offer two technical assistance programmes dedicated to governance and transparency:
The Management Training programme is focussed on the optimisation of an MFI’s cost structure and in particular financial efficiency, operational effectiveness and portfolio efficiency. It enables the managers and directors to increase the profitability of their MFI. Our technical assistance is structured in three stages: analysis, presentation of the results and monitoring.
The Managerial Coaching programme provides medium-term (between four and six months) support to the managers and directors of MFIs in order to help them improve their evaluation, analysis and decision-making processes. This technical assistance has been developed within the framework of the ADA-REDCAMIF project.