Opportunities in microfinance risk management

Karel Janda and Pavel Zetek

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the main risk management opportunities and threats, which microfinance institutions (MFIs) are exposed to. Awareness and understanding of these indicators can make the evolution of microfinance more accurate and simultaneously can help to locate the microfinance market in the broader picture of economic development. Growing competition improves the current situation for borrowers, because it leads to acceptable interest rates policy and expansion of existing microfinance services. At the same time, intense competition may represent threats, if the rules of regulation and supervision are not properly set. In this regard, we believe that the future of microfinance will significantly depend on the linkage between MFIs and financial markets, especially in the light of access to an alternative source of funding, the possibility of securitization and other complementary services.

Keywords: Microfinance; Microcredit; MFIs, Financial Crises (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
Date: 2013-01-23
New Economics Papers: this item is included in nep-ban and nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:43960

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