Gouvernail: Evaluating the Governance of a Microfinance Institution

How does IRAM evaluate governance of MFIs?
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This document presents the methodology developed by Institut de recherches et applications des methodes de developpement (IRAM) for evaluating the governance of a MFI.The document states that governance is:

  • An ever-present risk for MFIs;
  • A strategic issue when it comes to the sustainability of MFIs;
  • A complex issue, often addressed only partially.

It lists out unique characteristics of IRAM's governance evaluation model. These include:

  • Stakeholder approach: Governance is evaluated taking into consideration the diversity of stakeholders, including directors, owners, investors, donors, clients and members;
  • Systematic approach: Decision-making processes are systematically analyzed to reveal their complexities;
  • Comparative approach: Governance is analyzed through the documents produced by an institution and by observing how these texts are applied in day-to-day operations, the approach also analyzes governance during very specific moments of crisis or dysfunction.

The document concludes with a short quiz to test the awareness level of the readers regarding governance issues in microfinance.

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