Tuesday, September 25, 2007

Environmental and social risk management tools for MFIs

The Netherlands Finance Development Company FMO published on its website a series of new interesting tools for Microfinance Institutions. Some TSF participants have already participated in a dedicated training with other MFI's.

FMO has developed practical and easy-to-use environmental and social risk management tools for microfinance institutions (MFIs).
The E&S risk management support tools for MFIs, now available in English and Spanish, include:

Part A: Office Guide
The Office Guide consists of guidance on how E&S evaluation and follow-up processes (= the Environmental and Social Management System) can be put in place in alignment with the MFI's regular credit evaluation, approval and monitoring and reporting processes.

Part B: Field Guide
The actual Field Guide provides the MFI loan officer with practical guidance to address environmental and social themes in the contact with their clients. There are two main sections:

An Activity Assessment Tool - this is a matrix, summarizing the key environmental and social risks for each of the various sectors that MFIs work in: various forms of agriculture, services, and manufacturing.

24 Fact Sheets, describing in a practical way for each sector as identified in the Activity Assessment Tool, the relevant environmental and social themes, with simple to recognize icons,
guidance for the loan officer to assess the situation with the client for each of the relevant themes, explanation of the benefits for the microclients of improvement on environmental and social matters, and recommendations for possible prevention and mitigation measures (actions to agree upon with the client, practical advice), best practices,
Next this, information is given on the legal context, and practical tips for implementation.

Part C: Training Guide
FMO provides practical training courses to client MFIs and MFI Funds to help them underway in setting up the relevant management systems. This Training Guide Contains all the materials used, and these materials can be used in-house by the MFI to further train staff.

FMO published these Guides in English and Spanish here.