Governance in Microfinance

It was not by chance that the author chose the title Governance in microfinance in the context of an environment in the town of Goma the capital of North Kivu Province in the Democratic Republic of Congo where the enthusiasm for micro-credit had unfortunately not been encouraged by severe avant-garde measures against the enemies of the sector''s development. He refers to observations on the ground regarding the dismal failures of certain savings and loan cooperatives which were forced to close their doors without repaying their members'' investments. Apart from the non-repayment of loans the crisis in some cooperatives and microfinance institutions (MFIs) was exacerbated by a failure to comply with the rules of good management. Loans were distributed without sufficient regard for the soundness of the applications submitted. The sentimental preferences of managers sometimes took precedence over the policies and procedures in force. There is a substantial correlation between performance and the application of good governance standards.