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Key Pointers
Key Pointers
The potential for events or ongoing trends to cause future losses or declines in future
income of an MFI or deviate from the original social mission of an MFI.
Types of Risk
Financial Risk
o Credit Risk Non repayment of loans
Transaction Risk Individual level
Portfolio Risk Riske inherent in the portfolio due to its composition
o Liquidity Risk MFI runs out of cash and cannot meet its demands
o Market Risk
Forex Risk
Interest Rate Risk
Operational Risk
o Fraud Risk Intentional deceit by employee or client
o Regulatory and Legal
o HR & IT Risk
Strategic Risk Management bandwidth
Once companies proved that Microfinance was a viable model with 95% repayment rates,
international institutional money flowed into the MF industry in India Competition
Excessive investor pressure to meet earnings estimates Pressure to grow and increase
profits