Author: Womens World Banking Morgan Stanley Today May 2009

With the recent slowdown in economic activity and volatility of the market, risk management has become a critical issue facing organizations and in particular microfinance institutions (MFIs) around the world. This article featured in Morgan Stanley Today (internal employee publication) highlights the importance of risk management and tools necessary to navigate volatile markets and to remain focused on MFIs’ core business — bringing financial services to low-income microentrepreneurs. WWB, in partnership with Morgan Stanley, co-hosted leading microfinance institutions from around the world for a training workshop using interactive risk management tools. Participants engaged in several simulation exercises in which teams compete against each other as management teams of fictional companies tasked with assessing and making decisions around a series of risks such as refinancing, foreign exchange exposure, interest rate and customer credit risk. The workshop offered MFIs the opportunity to discuss strategies and identify insights on prioritizing risk to help their organizations better manage risk in the future.