Financial Management

As the microfinance industry evolves, there are more options available for microfinance institutions (MFIs) to finance their business, including different forms of debt, equity, and hybrid forms for raising capital.

Strategic business planning is a disciplined and pragmatic approach that organisations can use to make decisions now about the future. It enables them to make more informed choices and decisions, set future directions, establish priorities, allocate limited resources, improve operations and monitor results.

Accounting is one of the key cornerstones of good information systems in microfinance institutions. A good accounting system produces accurate, relevant and timely reports that enable meaningful analysis and monitoring of operations. This toolkit offers the key issues in setting up MFI accounting systems and structures.

This toolkit offers a practical training in basic financial management and ratio analysis for MFIs. It provides an overview of the key aspects of accounting in microfinance institutions describes the primary financial statements and portfolio reports of MFIs and describes the commonly accepted financial ratios used for monitoring, reporting and measuring MFI performance.