In the unique and dynamic world of microfinance, traditional risk management models often fall short. The very nature of micro-lending—small loan sizes, lack of formal collateral, and a client base often operating in the informal economy—demands a specialized, data-driven approach to risk. Risk analytics offers a powerful solution, enabling microfinance institutions (MFIs) to move beyond intuition and leverage data to make smarter, more sustainable lending decisions. This "Data-Driven Impact" training course is meticulously designed to provide you with the essential tools to build robust risk management frameworks.

This 10-day intensive program will guide you through the entire process of leveraging data for risk transparency and management in microfinance. You will learn how to collect and analyze non-traditional data points, build predictive models for borrower default, and implement a risk-based pricing strategy. The course combines theoretical knowledge with hands-on exercises, using practical case studies to illustrate how to apply these techniques in real-world scenarios. By the end of this training, you will be equipped to transform your MFI's risk management practices, ensuring both financial stability and greater social impact.

Duration: 10 days

Target Audience:

• Risk Managers and Analysts at MFIs
• Loan Officers and Credit Analysts
• Data Analysts and Scientists in the financial inclusion sector
• Senior Management and Board Members of MFIs
• Professionals from development finance institutions
• Consultants and advisors to the microfinance sector
• Students of development economics and finance
• Anyone working to improve financial access for underserved populations

Objectives:

• Understand the unique risk factors in microfinance
• Learn to collect and manage non-traditional data
• Master the fundamentals of credit scoring for micro-borrowers
• Gain proficiency in building predictive models for default
• Understand the principles of risk-based pricing
• Learn to use data to segment clients and design products
• Develop skills in portfolio-level risk analysis
• Understand the regulatory and ethical considerations of data use
• Prepare for the challenges of managing risk in a volatile market
• Implement a data-driven culture within your organization

Course Modules:

Module 1: The Microfinance Risk Landscape

• Unique risks in microfinance (e.g., character risk, group risk)
• The difference between commercial and microfinance risk management
• The role of social performance in risk management
• The importance of a holistic risk view
• A review of common risk types (credit, operational, market)

Module 2: Data Collection and Management

• The importance of a clean and reliable data set
• Collecting non-traditional data (e.g., loan officer notes, mobile data)
• The role of a management information system (MIS)
• The challenges of data privacy and security
• Best practices for data governance

Module 3: Foundational Statistics for Risk Analysis

• Review of key statistical concepts
• Understanding correlation and causation
• The importance of a representative sample
• The role of a null hypothesis
• A refresher on regression analysis

Module 4: Building a Credit Scoring Model (Part 1)

• The importance of a scoring model for micro-borrowers
• The difference between traditional and alternative scoring
• Identifying and selecting relevant variables
• The importance of a good variable definition
• The challenges of dealing with missing data

Module 5: Building a Credit Scoring Model (Part 2)

• The use of logistic regression
• The importance of a confusion matrix
• The role of a receiver operating characteristic (ROC) curve
• The challenges of model validation
• The importance of a clear and simple model

Module 6: Risk-Based Pricing

• The concept of risk-based pricing
• The importance of a profitable loan portfolio
• The use of a pricing model
• The challenges of a dynamic pricing strategy
• The ethical considerations of pricing

Module 7: Loan Portfolio Analysis

• The importance of a portfolio-level view
• The use of a loan delinquency aging report
• The importance of a concentration analysis
• The use of a portfolio stress test
• The role of a loan loss provision

Module 8: Operational Risk Analytics

• The importance of a robust operational risk framework
• The use of data to identify operational losses
• The role of a fraud detection model
• The importance of a strong internal control system
• The role of a loss database

Module 9: Social Performance Management

• The importance of a dual bottom line (financial and social)
• The use of data to measure social impact
• The role of client protection principles
• The importance of a responsible lending culture
• The challenges of balancing social and financial goals

Module 10: Digital Risk and Cybersecurity

• The importance of a secure digital platform
• The risks of mobile money and digital lending
• The role of a cybersecurity framework
• The importance of a robust authentication process
• The challenges of a rapidly evolving digital landscape

Module 11: Application to Group Lending

• The unique risks of a group lending model
• The role of a peer-to-peer dynamic
• The importance of a group formation process
• The use of data to monitor group performance
• The challenges of a group-level analysis

Module 12: Application to Agricultural Lending

• The unique risks of agricultural lending
• The role of a seasonal cash flow
• The importance of weather and climate data
• The challenges of a remote and dispersed client base
• The use of satellite data and mobile technology

Module 13: Case Studies in MFI Risk Analytics

• A deep dive into successful MFI risk analytics implementations
• The challenges of a real-world project
• The importance of a strong business-data partnership
• The role of leadership in adopting a data-driven culture
• Lessons learned from the field

Module 14: Regulatory and Ethical Considerations

• The role of a microfinance regulator
• The importance of data privacy laws
• The ethical use of data and AI
• The challenges of a fair and transparent model
• The importance of a client-centric approach

Module 15: Final Project and Discussion

• A hands-on project to build a risk model for an MFI
• Presenting your model and findings
• A discussion of remaining challenges and open problems
• The importance of a continuous learning mindset
• The future of risk analytics in microfinance

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.