Institutional Integrity and Risk Management in Microfinance
Introduction Strong governance and ethical discipline are essential pillars of sustainable microfinance operations. As microfinance institutions expand their outreach and diversify services, the risks related to governance failures, misconduct, and weak oversight increase. A Code of conduct assessment for MFIs provides a structured way to evaluate how effectively an institution manages ethical risks, aligns staff behavior with institutional values, and ensures accountability across all operational levels. This type of assessment is increasingly viewed as a core risk management tool rather than a standalone compliance exercise. The Link Between Ethics and Risk in Microfinance Ethical Weaknesses as Institutional Risks Ethical lapses in microfinance can quickly evolve into serious institutional risks. These may include reputational damage, regulatory sanctions, loss of investor confidence, and declining client trust. Even minor misconduct at the field level can escalate if not addressed ...