Background

Recent events in the financial inclusion industry have highlighted that improvements in the corporate governance of MFIs are indispensable to ensure the sustainability of the sector, help achieve its double bottom line objectives, and reduce the risks to its reputation. In fact, recent publications highlight good governance as the primary differentiating factor between MFIs that overcome a crisis and those that do not.

The Governance Working Group (GWG) aims to bring together leading experts and initiatives to address the challenge of improving governance in the industry. The GWG coordinates the different governance initiatives in the financial inclusion industry, conducts research to advance the state of knowledge and practices, and engages with different stakeholders to implement and improve practices.

History

The Working Group was created by the World Microfinance Forum Geneva in 2010. In early 2012, the Center for Financial Inclusion at Accion (CFI) became the institutional host of the Governance Working Group, and CGAP has been an active partner.

Membership

The Governance Working Group brings together practitioners, investors, development banks, multilateral organizations and leading research facilities in the field of financial inclusion. More information on the GWG’s current members can be found in the Membership Directory. New members are always welcome, and if you would like to join the GWG, please email Andrea Horak ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) at the CFI. 

1. Increase visibility and raise awareness about the importance of good governance

Achievements:

• The Governance Working Group now has an institutional home through the CFI with a dedicated Governance Working Group Website, which consolidates governance information and resources for the GWG into one place. This page includes membership information, newsletters, member updates, links to blogs, and other governance‐related information.
• The visibility of governance has been increased with the creation of a new Governance Hot Topic on the Microfinance Gateway including FAQs, recommended readings, and an extensive library of publications and documents.
• The GWG has extensively discussed and developed a generally agreed upon vision for good governance.

In progress or planned:

• Many recent studies (i.e. Failures in Microfinance: Lessons Learned and Weathering the Storm: Lessons in Microfinance Crisis Survival) highlight the importance of governance in the financial inclusion industry but more work is still needed in this area.

2. Improve industry collaboration and reduce duplication of efforts

Achievements:

• The CFI hosts regular webinars and calls to foster collaboration and discussion. To date, webinars have included topics such as social performance, responsible exits, and shareholder vs. stakeholder governance views.
• The GWG webinars and calls serve as an opportunity for members to provide updates on their governance related work and also to discuss mutual goals. GWG members are now more aware of the other governance initiatives taking place in the industry and instead of duplicating efforts, many new collaborative joint projects have come out of these exchanges.
• The CFI also sends out regular governance newsletters providing updates on members’ governance related work and also on recent governance publications and industry efforts.

In progress or planned:

• The CFI continues to recruit new members to join the group that are working on governance related efforts to incorporate new players and improve collaboration within the industry.
• The next GWG webinar will cover the topic of governance regulation.
• Refresh and publish a governance industry mapping on the CFI’s GWG website.

3. Create behavioral change through governance‐strengthening and training efforts

Achievements:

• Members of the GWG have created trainings that incorporate both traditional lecture and transfer of best practices and skill‐building, but that go further to also incorporate experiential learning, case analysis, role play, and peer‐to‐peer exchange.

In progress or planned:

• Figure out how to build in incentives for changing behavior. It is becoming clearer that incentives are fundamental for strong governance.

4. Develop benchmarks and advance best practices and standards around governance

Achievements:

• The GWG developed a set of self‐reporting governance indicators that were tested by the MIX and resulted in Measuring Governance in Microfinance: Initial Findings from a Pilot Project.

In progress or planned:

• Develop governance benchmarks to improve the data available on good governance measures.
• Create an industry‐wide and scalable approach to implementing
• Compare governance indicators along with financial data to build a better business case for governance.

Contact

For more information, please contact Andrea Horak ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) or Danielle Piskadlo ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) at the CFI.