MFI financing: a highly structured process at BNP Paribas
At BNP Paribas, microfinance involves an especially rigorous financing process, from selecting an MFI to monitoring its actions. The goal of this meticulous approach is to guarantee the impact of the MFI and its operation in a transparent manner, while eliminating risks (including financial risks, as well as those of improper use, money laundering, etc.) and providing long-term support.
- Financing is originated after a detailed study phase, based on eligibility criteria, combined with a country risk analysis and an on-site visit.
- A local BNP Paribas correspondent is appointed and the characteristics of the credit line are negotiated.
- A comprehensive analysis of risks associated with the MFI is performed: organizational, financial, social performance, etc.
- Once the financing is accepted, a compliance procedure is put in place, which requires approval from the country manager. A credit committee is also formed to analyze each request.
- Continuous follow-up is then set up, including quarterly reports and permanent contact with the local BNP Paribas entity.