Risk management

Why learn to manage the risks faced by an MFI?

Managing risks appropriately strengthens an MFI’s credibility on the market and generates new growth opportunities.

Like all financial institutions, an MFI is exposed, on a daily basis, to numerous internal and external risks which represent a threat to its stability, profitability and sustainability. It is therefore essential to be able to calculate and manage these risks effectively. Whilst it may be impossible to control external causes of disruption and upheaval, it is possible to prepare for these eventualities in order to limit their impact.  Internal issues, such as credit and liquidity risk, market and pricing, operations and compliance can all be managed thanks to quantitative methods of identification, monitoring and control of the different factors involved. 


 

ADA3T Tools

Our risk management tool    

The Risk Management Graduation Model for MFIs (RMGM) is a practical tool presented in the form of a road map to be followed in order to carry out an assessment and to identify pathways to improve the risk management of an MFI. On the basis of an assessment process, an MFI can evaluate its system, structure and current risk management capacity against the best practices in the sector.

The “Risk Management Initiative in Microfinance” (RIM) has developed this tool, which is based on current good risk management practices, in accordance with the Basel regulation and has adapted it to microfinance.
 

Download the RMGM tool free of charge from the RIM platform


ADA provides you with support to analyse your risk management using the RMGM tool. This analysis will enable you to assess the current situation and to issue recommendations for the progressive and optimal structuring of your institution’s risk management.  


 

ADA3T Trainings

Our risk management training courses

ADA3T Technical assistance

Our technical assistance

We offer two forms of technical assistance to help you to improve your risk management: 

  • Risk management coaching programme (1 to 3 years). At the end of the risk management seminar held in Luxembourg, the MFIs which have attended the seminar have the opportunity to apply to take part in a coaching programme to develop their risk management department.  
  • Risk management analysis using the MPGR tool. The aim of this technical assistance is to analyse an MFI in terms of risk management in order to develop and implement a plan of action.


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