05.09.2011
Microfinance Institutions Receive Credit Risk Workshops
In July 2011, a series of workshops were held with Microfinance Organisations in Ramallah, Palestine on “Data Quality, Risk Management and Benchmarking”. They were designed specifically for the Microfinance Institutions (MFIs) using actual historic data from these institutions held by the Palestine Monetary Authority (PMA) Credit Register for the primary purpose of credit reports.
The workshops were funded by USAID through the Academy for Educational Development (AED), located in Ramallah, and their programme for Expanded and Sustained Access to Financial Services (ESAF). Microfinance Network (Sharakeh), an association of the MFIs in Palestine, was also involved in the organisation and facilitation of the workshops.
The primary goals of the workshops were:
Filip Trojan, the Senior Consultant who conducted the training, commented: “The data from Credit Bureaus is often not fully used to support MFIs. The Benchmarking reports that were provided enable each MFI to identify from a strategic perspective areas of relative weakness in their portfolios and create clear action plans to address them; and the Data Quality ensures constant improvement from an operational perspective.”
Representatives from the MFIs particularly appreciated the interactive discussions with the trainer, the PMA and amongst themselves, resulting in mutual knowledge transfer and a better understanding of the subject matter.
The scoring models at present being used in the Palestinian Credit Bureau were implemented 1 year ago by Creditinfo. The MFIs have been using the credit scores since that point. The additional benefits from these workshops will allow the information to be better used, promoting the growth of the Palestinian economy even in the current challenging climate.
About The Palestine Monetary Authority
The PMA was initially established by a decree of the Palestinian Authority (PA) in December 1994, following the Oslo Accords signed between the Palestine Liberation Organisation (PLO) and Israel in 1994. Under the Accords, the PA acquired the right to establish its own Monetary Authority to implement and regulate monetary policies in Palestine. The PMA currently operates under PMA law no.2 of 1997, passed by the then newly-established Palestinian Legislative Council.
About The ESAF program
The ESAF program supports USAID in its efforts to build a more inclusive financial sector that increases the sustainable access to financial services for Palestinian households and micro, small and medium enterprises. Through a variety of interventions, ESAF is addressing weaknesses in the financial system at all levels, from banking to the financial industry to regulatory environment.
Go back- To identify portfolio weaknesses through comparison against industry benchmarks, prepared on the basis of Credit Bureau data.
- To introduce the concept of data quality to the MFIs and bring them onto the next level of data quality assurance for Credit Bureau input data.
- To underline the best use of Credit Bureau Scores that will improve the effectiveness in using this information for better risk management decisions.
Filip Trojan, the Senior Consultant who conducted the training, commented: “The data from Credit Bureaus is often not fully used to support MFIs. The Benchmarking reports that were provided enable each MFI to identify from a strategic perspective areas of relative weakness in their portfolios and create clear action plans to address them; and the Data Quality ensures constant improvement from an operational perspective.”
Representatives from the MFIs particularly appreciated the interactive discussions with the trainer, the PMA and amongst themselves, resulting in mutual knowledge transfer and a better understanding of the subject matter.
The scoring models at present being used in the Palestinian Credit Bureau were implemented 1 year ago by Creditinfo. The MFIs have been using the credit scores since that point. The additional benefits from these workshops will allow the information to be better used, promoting the growth of the Palestinian economy even in the current challenging climate.
About The Palestine Monetary Authority
The PMA was initially established by a decree of the Palestinian Authority (PA) in December 1994, following the Oslo Accords signed between the Palestine Liberation Organisation (PLO) and Israel in 1994. Under the Accords, the PA acquired the right to establish its own Monetary Authority to implement and regulate monetary policies in Palestine. The PMA currently operates under PMA law no.2 of 1997, passed by the then newly-established Palestinian Legislative Council.
About The ESAF program
The ESAF program supports USAID in its efforts to build a more inclusive financial sector that increases the sustainable access to financial services for Palestinian households and micro, small and medium enterprises. Through a variety of interventions, ESAF is addressing weaknesses in the financial system at all levels, from banking to the financial industry to regulatory environment.