Microfinance Banking Operations

At the end of this training participants will be able to understand:

• The different aspects and types of MFB.
•  How a microfinance bank operates
• Asset management and liability management
• The principles and basic methods of MFB’s system.
• Manage the assets and liabilities of their Banks profitably
• Manage the financial risks  in Microfinance Banking
• Explain the fundamentals of the lending activity
• Introduce the investment decision criteria
• Explain the role of the financing decision on the value of the firm

CONTENT
Introduction to microfinance banking

• Banker customer relationship
• Types of customers and their account
• Negotiable instruments and related matters

Introduction to marketing in bank

• Marketing of bank services
• Payment and settlement systems
• Customer relationship management

Information asymmetries

• Adverse selection and signalling
• Moral hazard
• Consequences
• Credit rationing
• The role of the long-term relationships in credit activity
• How to solve information asymmetries

The role of collateral

• What is collateral?
• The 3 reasons for the use of collateral
• The role of capital
• The role of character
• Investment decision rules
• Net Present Value
• The NPV decision rule
• What does NPV depend on?
• Alternative decision rules
• The internal rate of return
• Other investment criteria

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participants will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.