Accounting and Reporting Standards for Microfinance Institutions
Paul B McGuire, 1996 (15 pages + annex)
Abstract
This introduction to accounting and reporting standards for microfinance institutions was prepared for a meeting of the BWTP Network held in Singapore in July 1996.
It is important for institutions engaged in microfinance to adhere to sound accounting and reporting standards. International donor agencies, not to mention commercial banks and capital markets, are increasingly demanding a high standard of accounting and reporting from microfinance institutions that they support. Relevant accounting and other data are also essential if institutions are to monitor their own performance properly, both in terms of their financial sustainability and their success in reaching the poor.
This paper discusses the recent emphasis on accounting and reporting standards. It explains the key features of the Guiding Principles for Selecting and Supporting Intermediaries, agreed by the Committee of Donor Agencies for Small Enterprise Development and the Donors' Working Group on Financial Sector Development. It then goes on to note some areas that some members of the BWTP Network may need to look at, if they are to present data about their operations in the generally accepted format. The Guiding Principles are provided as an Annex to the paper.