FMO

March 1, 2008    

Score: 73/100

Key Findings 

It is preeminent in the flexible use of its funding instruments, and has been the leader among the DFIs in local currency funding.  Working in microfinance with both its own funds (FMO-A) and government funds (MASSIF) provides FMO the opportunity to have more appetite for risk.  However, it has somewhat thin microfinance expertise beyond a few well-qualified staff, especially in light of its growth strategy, and continued role in governance and advancing innovations.

Suggestions to Increase Agency’s Effectiveness and Scores

• Conduct a SWOT analysis to better understand the capabilities and constraints FMO faces to implement “Access 2010,” and refine the strategy and approach accordingly.
• Continue to develop strategic partnerships and other mechanisms that allow FMO to be closer to the institutions it funds, given its centralized structure.
• Assess human resources against strategy and bolster microfinance capacity.  Strengthening FMO’s microfinance capacity can be achieved by hiring new staff with a solid microfinance track record, providing in-depth training for current staff, and organizing exposure assignments for staff to spend time with microfinance institutions in partner countries.
• Institute minimum microfinance training requirement for staff in regional departments working on microfinance, with a focus on effective supervision of microfinance deals.
• Create incentives to ensure that smaller transactions—that often require even more staff time—receive the attention required.
• Undertake regular portfolio reviews of both the FMO-A and MASSIF microfinance portfolios to obtain detailed information on the performance of investments using internationally accepted microfinance-specific performance indicators on portfolio quality, efficiency, profitability, and outreach.  Such reviews will help uncover patterns of what works and what does not work well to further inform the strategy.