Microfinance Banana Skins 2008 - Citigroup

C S F I / New York CSFISummaryBiggest risksMicrofinance Banana Skins2008Fastest risers1 Management quality 1 Competition2 Corporate governance 2 Staffing3 Inappropriate regulation 3 Political interference4 Cost control 4 Too much funding5 Staffing 5 Credit risk6 Interest rates 6 Strategy7 Competition 7 Mission drift8 Managing technology 8 Ownership9 Political interference 9 Interest rates10 Credit risk 10 Unrealisable expectations11 Transparency 11 Reputation12 Foreign exchange 12 Corporate governance13 Unrealisable expectations 13 Managing technology14 Mission drift 14 Fraud15 Fraud 15 Natural catastrophes16 Strategy 16 Cost control17 Ownership 17 Management quality18 Back office operations 18 Foreign exchange19 Reputation 19 Product development20 Liquidity 20 Profitability21 Too much funding 21 Inappropriate regulation22 Profitability 22 Distribution channels23 Macro-economic trends 23 Liquidity24 Product development 24 Macro-economic trends25 Capital availability 25 Back office operations26 Distribution channels 26 Transparency27 Natural catastrophes 27 Refinancing28 Refinancing 28 Capital availability29 Too little funding 29 Too little fundingThis survey explores the risks and challenges facing microfinance as a business and asocial service at a time when the sector is undergoing profound changes.Originally a small-scale, philanthropic movement to provide credit to the neediest,microfinance has grown enormously in recent years and is now firmly established asa major supplier of a wide range of financial services to millions of people aroundthe world. The 1,200 microfinance institutions (MFIs) who report to theMicrofinance Information eXchange (MIX) have 53m borrowers and 64m savers,6 CSFI / New York CSFI E-mail: info@csfi.org.uk Web: www.csfi.org.uk