Microfinance Banana Skins 2009 Microfinance Banana Skins 2009 - Le ...

C S F I / New York CSFI11. Interest rates. Will MFIs be able to protect themselves againstchanges in interest rates which are beyond their control, for examplethose set by competition or central banks? These rates apply both totheir cost of funds and their loan pricing.12. Liquidity. Will MFIs be able to manage their cash resourcessuccessfully, both those for whom it is in short supply, and those with asurplus? Will the current financial crisis constrain MFIs’ ability toobtain cash to run the business?13. Macro-economic trends. Are MFIs vulnerable to pressures in thewider economy, for example inflation, recession or volatile commodityprices?14. Management quality. Will MFI management be up to the challengeof growing the business and managing the risks?15. Managing technology. With technology an increasingly key part ofmanaging and delivering microfinance, will MFIs be able to master thisdifficult area?16. Mission drift. Are MFI missions commercially viable; will they beable to stick to their stated missions?17. Ownership. Are the ownership structures of MFIs appropriate andstable for their line of business?18. Political interference. MFIs may face political pressures, for examplein the areas of interest rates, lending terms and subsidised governmentprogrammes. How big a risk do these pose to the business?19. Product development. Will MFIs be able to develop the rightproducts and manage them successfully?20. Profitability. Will the MFI sector be able to sustain adequate levels ofprofitability to ensure growth and commercial viability?21. Refinancing. Will investors and donors renew their financial supportfor the capital of the business when the time comes?22. Reputation. Will MFIs be able to sustain their good reputation?23. Staffing. Will MFIs be able to recruit and retain good staff?24. Transparency. Do MFIs report enough good information to sustainconfidence in the sector? Do they conform to international accountingstandards?25. Unrealisable expectations. Is the sector vulnerable to hype? Dopeople expect too much of microfinance, and what happens if MFIs failto deliver?In Question 3, we ask you to say how well prepared you think MFIs are to deal withthe risks you mentioned. Please tick Poorly, Mixed or Well.42 CSFI / New York CSFI E-mail: info@csfi.org.uk Web: www.csfi.org.uk