Microfinance Risk Management Principles

Front

What is the main concern in microfinance according to Principle 13?

Back

Risk is a major concern in microfinance.

Front

What must supervisors ensure regarding banks and market risks?

Back

Supervisors must ensure that banks have policies and processes to identify, measure, monitor, and control market risks.

Front

What is a significant challenge for ODTIs regarding market risk?

Back

Managing the currency mismatch between microloans in local currency and funding in foreign currency.

Front

What should regulators do to manage foreign currency risk for ODTIs?

Back

Regulators should restrict an institution’s net open position by establishing limits in relation to capital and/or earnings impact.

Front

What is required from ODTIs in terms of liquidity management according to Principle 14?

Back

ODTIs must have a liquidity management strategy that identifies, measures, monitors, and controls liquidity risk.

Front

What unique features should be considered in liquidity risk management for microfinance?

Back

The specific dynamics of microfinance assets and liabilities.

Front

What should ODTI liquidity plans include according to Principle 14?

Back

Simple stress scenarios taking into account contagion effects.

Front

What is the focus of Principle 15 regarding operational risk?

Back

Supervisors must ensure that banks have risk management policies to identify, assess, monitor, and control operational risk.

Front

What is a significant trend in microfinance operations related to operational risk?

Back

Outsourcing activities such as collecting deposits and verifying customer identity.

Front

What should supervisors ensure regarding interest rate risk in the banking book according to Principle 16?

Back

Supervisors must ensure that banks have effective systems to identify, measure, monitor, and control interest rate risk.