Once microfinance becomes a regulated activity, regulators must learn how to effectively supervise and analyze the unique risks posed by this business. Here are several tools to help build effective supervision models:
» Audit Information Resource Center
The Microfinance Gateway’s Audit Information Resource Center provides useful tools for analysis, as well as a discussion forum for helping regulators understand effective approaches to auditing microfinance institutions.» Due Diligence Guidelines for the Review of Microcredit Loan Portfolios
This newly published CGAP handbook can assist supervisors to evaluate the accuracy of reported levels of repayment and the extent to which the MFI employs sound loan management practices.» Learn more about ACCION CAMEL™
ACCION, a network of commercial microfinance institutions, has adapted the CAMEL management tool originally developed by the Federal Reserve for use in microfinance institutions.» World Council of Credit Unions (WOCCU) PEARLS Monitoring System (184 KB, PDF)
This sytem offers techniques for measuring key areas of credit union operations: protection, effective financial structure, asset quality, rates of return and cost, liquidity, and signs of growth. It can be used either as an internal monitoring tool or as an effective way for credit union supervisors to objectively measure and compare performance.