Working in the Context of Today's Crisis, Managing the Risks and Challenges
This paper reports on the second day's proceedings of the conference, 'Cambodia's Microfinance amid the Global Financial Crisis.' The objective of the session was to share and encourage discussions on best practices that MFIs can implement to tackle the challenges arising from the crisis.
The global financial crisis has had an impact on the entire Cambodian microfinance industry. MFIs report liquidity shortages, as committed loans are delayed and new loans are slow in being committed. Cambodia's microfinance industry has been facing a rise in portfolio at risk and non-performing loans (NPLs). This could possibly be on account of the poor risk management systems of the MFIs. The second day's discussions focused on:
- Good practices in risk management;
- Ethical and responsible collections practices;
- Consumer protection;
- Financial transparency;
- Investments to strengthen social capital;
- Role of credit bureaus in promoting financial inclusion.
The paper recommends responsible finance, transparency and fair and equitable practices to tackle the challenges of the crisis, and build a healthy, competitive and vibrant microfinance market.