Document Type

Working Paper

Date of this Version



Keith Weiglt


How can better management of internal financials at microfinance institutions (MFIs) provide more value to clients? Much research has been conducted to show the usefulness of microfinance, the effects of client behavior, the benefits of internal controls, and so on. The literature covers nearly every facet of microfinance. However, little has been examined in regards to the financial management of MFIs.

Indeed, financial management seems more a topic of Wall Street financiers than of Bill Drayton’s ‘Changemakers’. However, MFIs, like all businesses, must manage cash flows, interest rate risk, working capital, etc. Thus, unless the internal financials of MFIs are sound, these institutions will be unable to effectively and sustainably scale up to serve more clients, more products, and more geographies.

This research paper seeks to examine the various financial components of the internal system of Caja Rural Los Andes, a rural Peruvian microfinance institution (hereafter ‘CLA’), and how that system impacts its ability to provide value to its microcredit clients.

This paper will begin with an overview of microfinance and securitization – a financial process that has been applied to microfinance in recent years, and the original focus of this research project – and continue with a brief account of Peruvian microfinance.

In the second half, this research paper will dive deeper into CLA’s financial accounts, and discuss the considerations and potential opportunities for each. The paper will then discuss the framework Treasury model that was built for CLA and methods for improving cash management at the bank. The paper will conclude with a few suggestions and final thoughts.


cash management, Peru, social impact

Included in

Business Commons



Date Posted: 17 April 2013


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