MICROCAPITAL BRIEF: Standard Chartered, MicroSave Launch Microfinance Risk Management Toolkit

The Bangladesh branch of Standard Chartered PLC, an international bank headquartered in the United Kingdom that reported total assets of USD 436 billion in 2009, and MicroSave, a company based in India that specializes in technical assistance and training for microfinance organizations, have jointly launched a risk management toolkit for microfinance institutions (MFIs). The launch took place in Bangladesh and included a panel discussion, followed by a three-day training program. Participants included banks, MFIs, regulators, investors and government agencies.

The toolkit addresses risks inherent to MFIs such as credit risk due to the lack of borrower collateral and risks that relate to operating widely dispersed, remote service locations. The toolkit also addresses mainstream financial risks such as market and interest rate risks which are more relevant to MFIs as they diversify into new products and markets and rely more on funding from commercial banks [1].

MicroSave was established in Africa in 1998 and moved its head office to Lucknow, India, in 2006. Its mission is to strengthen the capacity of financial service organizations by providing customized advice and engaging in bottom-up primary research. Financial data is not available for MicroSave.

By Julie Moksim, Research Associate

About Standard Chartered PLC: Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. The bank has approximately 1,600 branches in approximately 70 countries. Since the 1990’s, Standard Chartered has focused on developing its franchises in Asia, Africa and the Middle East. As of 2008, Standard Chartered has extended USD 385 million in loans to 52 microfinance institutions, with an average loan size of USD 7 million. The bank reported total assets of USD 436 billion in 2009.

About MicroSave: Established in Africa in 1998, MicroSave is a technical assistance, training and resource center for microfinance. It was established and financed by the United Nations Development Program (UNDP) to address the mono-credit culture prevalent in East and Southern Africa. MicroSave’s headquarters was relocated to Lucknow, India, in 2006. In 2008, MicroSave was transformed into a consulting company, which has since completed projects in Cameroon, Congo, Ethiopia, Ghana, Kenya, Malawi, Nigeria, South Africa, Tanzania, Uganda and Zambia. MicroSave has also established a presence in India with support from ICICI Bank. No financial data is available for MicroSave.

[1] MicroSave: “Standard Chartered and MicroSave Launch Risk Management Toolkit for MFIs”, http://www.microsave.org/announcement/standard-chartered-and-microsave-launch-risk-management-toolkit-for-mfis-december-13-20

Risk Management Toolkit

http://microsave.org/toolkits/2/31

MicroCapital’s Microfinance Universe Profile: Standard Chartered PLC

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Standard+Chartered+PLC

MicroCapital’s Microfinance Universe Profile: MicroSave

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroSave

MicroCapital.org Article, November 16, 2010: MicroSave Launches Social Performance Management Framework for Microfinance Institutions (MFIs), https://www.microcapital.org/microcapital-brief-microsave-launches-social-performance-management-framework-for-microfinance-institutions-mfis/

MicroCapital.org Article, September 16, 2010: MicroSave and Microfinance Focus Form Strategic Alliance to Expand Microfinance Resources: https://www.microcapital.org/microcapital-brief-microsave-and-microfinance-focus-form-strategic-alliance-to-expand-microfinance-resources/

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