Microfinance Transparency and Reporting to Donors

The brief sees that the donor reporting process can be a powerful tool to improve MFI performance and transparency when it includes presentation and credible independent confirmation of core indicators such as loan collection, financial sustainability and client poverty levels. The document finds that financial transparency relies on the proper functioning of several distinct processes:

• Information systems that gather and report timely, accurate, and useful data;
• Internal controls and external audits that ensure data integrity;
• Benchmarking against industry standards, based on the performance of peer institutions;
• Assessment of performance quality;
• Supervision of deposit-taking MFIs by financial authorities to ensure compliance with applicable standards.

This document is also available in Russian, Chinese and Arabic here.