This includes understanding the general economic conditions in the country such as growth rates, exchange rates, interest rates and inflation. It is also important to understand the legal framework governing micro lending services in Kenya.
It is important to assess the capital cushion that is available within an MFI to ensure that it has enough financial resources to meet its operational needs. Additionally, assessing liquidity levels will help you ascertain whether an MFI can service its loan portfolio efficiently.
Assessing credit risk management practices within a micro lender can provide insights into their ability to manage loan portfolios. This includes understanding the systems and processes in place for credit appraisal, monitoring of loans and collection activities.
It is important to understand the governance structure within an MFI as this will provide insight into its operation and the behavior of staff members. An effective board of directors that understands micro lending principles can provide oversight on strategic decision making within a micro lender.
By considering these factors when conducting due diligence on micro lenders in Kenya, organizations can make informed decisions on whether they are suitable partners for investing in micro lending services.
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Micro Lending That Makes A Difference
