Institutional Governance and Greater Financial Inclusion

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Financial services can be delivered in the long term only with sound, healthy financial institutions. Good governance practices make a contribution on this front, since they have a direct positive impact on institutional performance. In Latin America and the Caribbean, however, the adoption of governance standards and practices is still limited and insufficient, particularly at microfinance institutions (MFIs) and credit unions that serve poor and lowincome populations, comprised mainly of women and individual clients in rural areas with difficult access to the financial system. The project is a joint effort between the Swiss Agency for Development and Cooperation (SDC) and the MIF to improve governance at these institutions, thereby promoting the expansion of quality financial services to those clienteles. The project's intervention model is based on the generation of state-of-the-art instruments for assessing the MFIs and credit unions and launching processes to reform and change their systems of governance, through external technical support and training for their governing bodies and managers. The project will also promote the development of advisory service offerings by working with local training centers and a group of consultants with specialized qualifications and knowledge. The project will pursue partnerships with regulators, investors, associations of financial institutions, and risk rating agencies, in order to have an impact on incentives for better governance systems. As a result, the institutions participating in the process will be in a position to make better decisions for strategic and operational management and, ultimately, to advance financial inclusion in the region.