Managing Microfinance Risks: Some Observations and Suggestions

Risk is an integral part of financial intermediation. Hence, risk management must be at the heart of finance. However, it is disturbing to note that systematic risk management is still not as widespread as it should be in the microfinance industry. Except for a few flagship microfinance institutions (MFIs), which constitute the core of the industry, most MFIs do not pay adequate attention to systematic risk management. The microfinance industry has grown rapidly during the last decade in breadth, depth, and scope of outreach. The rapid growth seems to continue, given the massive unserved and underserved market. The growth of the industry has changed the risk profile of MFIs. Yet many MFIs seem to continue to seek growth without much attention to attendant risks. Surprisingly, many MFIs appear to neglect even the basic credit risk management which helped MFIs achieve high growth rates historically. The growing interest of many MFIs in agricultural microfinance must be seen in the broader context of risk management in the industry. Financing agriculture is more risky than financing trade or industry; it is also more risky than financing nonagricultural microenterprises. However, MFIs interested in agricultural microfinance should be more concerned about their internal structures and capabilities rather than the widely discussed, and often cited, pervasive risks in agriculture and their ramifications for the MFIs’ pursuit of growth in agricultural microfinance. MFIs should recognize the inherent risks in agriculture. However, if they build their institutional capacity to effectively deal with risks generally associated with financial services for poor and low-income households, their prospects for success in agricultural microfinance would certainly be much brighter. In addition, no amount of sophisticated and modern technical tools and analysis can help achieve effective risk management in respect of nonagricultural or agricultural microfinance if risk management is not embedded into the institutional culture and its value is not shared by all employees. Achieving this goal remains one of the most challenging tasks in risk management which MFIs need to address. To help in this effort, we need to bring into the discussion—now dominated largely by issues related to introducing sophisticated systems and technical tools of risk management—the institutional cultural issues and issues related to cognitive biases in executive decision-making behavior.microfinance,risk management,liquidity crisis,delinquency crisis

Towards a dialogic management of cognitive competence

In this paper we examine the nature of the competences needed for promoting innovation and change. Taking our experiences as the starting point, we examined the literature and interviewed managers and those responsible for innovation in enterprises and discovered that our research findings contradict the simplistic view of innovation facilitation and management material in the work place. Our research suggests that for innovation to take place two contradictory notions, the order principle and the disorder principle, have to be engaged at the same time. As a philosophy, the Positivistic epistemology is unable to handle these contradictions. Therefore we suggest the use of Morin's “dialogy” as a way of managing these contradictions essential for innovation."Innovation and change";"order and disorder";"management";"contradictions";"dialogy"

A petrological study of some low grade metamorphic rocks from Asahigawa and Horokanai regions, Kamuikotan Metamorphic Complex, central Hokkaido

Thesis--University of Tsukuba, D.Sc.(A), no. 748, 1990. 3. 2

Extract Of Gelidiella Acerosa (S-Act-1) As A Capacitation Agent For In Vitro Fertilisation In Goat

A study was conducted to determine if goat ovaries obtained from a slaughterhouse could be used for in vitro fertilisation (lVF). Three experiments were conducted to ascertain if a substance named S-ACT-l, extracted from a marine algae, (Gelidiella acerosa), with a chemical structure similar to heparin could be used for sperm capacitation. The acrosome reaction was tested by a dual staining technique (Experiment 1 ) and the zona free hamster penetration test (Experiment 2). In vitro maturation o f goat oocytes and fertilisation were assessed by the number of zygotes cleaving beyond the 2-cell stage (Experiment 3). Freshly ejaculated semen from two fertile bucks were used for sperm capacitation using two defined media (DM-H and DM-Ca). Heparin and S-ACT-l were tested at concentrations of 10, 20, 50 and 100 ug/ml. After incubating for 15 min. at 39° C with 5 % CO2 in air under maximum humidity, samples were stained with trypan blue and Giemsa stain (dual stain). The results indicated that the sperm treated with heparin and S-ACT - 1 showed similar staining characteristics

On understanding the applicability of Mohr-Coulomb failure hypothesis for composite materials using UnitCells©

The applicability of Mohr-Coulomb (M-C) failure hypothesis for anisotropic composite materials is re-examined in this paper. Mohr-Coulomb failure theory has been widely referred to in the literature to study the failure of unidirectional (UD) fibre reinforced composites under transverse loading including the renowned Puck’s criteria. This has been partially validated based on the experimental correlations with the predictions made by the M-C criterion for a few set of test cases, which remains a debatable way of formulating composites failure criterion. It is brought to attention that Mohr utilised the concept of principal stresses in constructing principal circles and assumed that the outermost circle represents the critical state of failure. This hypothesis and its derivative “failure is dictated by the stresses acting on the fracture surface” have thus been used for formulating the criterion for isotropic materials that exhibit brittle fracture characteristics. However, the concept of principal stresses is not employable in the analysis of composites. Hence, the same hypothesis may not be applicable in studying composite materials. Also, the micromechanical aspects that lead to failure have not been taken into consideration in this hypothesis which can lead to incorrect predictions in the case of composite materials. The capability of an appropriately representative unit cell model in better understanding the micromechanical aspects and the implications of the hypothesis is studied by attempting micromechanical analysis of UD composites through UnitCells© tool. It is utilised to locate stress concentrations within the unit cell from which the likely angle of the fracture surface can be identified. It has also been shown that the stress concentrations could help locate the fracture angle for UD composite materials as a sufficient but not a necessary requirement due to the presence of non-linear behaviour before fracture. If one wishes to employ M-C failure hypothesis to formulate a failure criterion, the assumption that the failure is determined by the stresses exposed on fracture surface has to be made with caution