Treasury management toolkit

Treasury management is of growing importance for those microfinance institutions that have matured into regulated and supervised financial institutions and begin to intermediate deposits. This toolkit aims at supporting them in their development towards formalisation, and equip microbankers with treasury management tools that combine sophisticated banking know how with innovative microfinance practices. It addresses the following areas: Treasury management is risk management: Liquidity risk, credit risk, interest rate risk, capital adequacy and leverage risk; Interest rate risk: Definitions, determinants, impact on asset value and net income, measuring interest rate sensitivity, GAP management; Capital adequacy and leverage risk: functions of bank capital, regulatory capital adequacy, capital management and sustainable internal growth; Organizational and policy aspects of treasury management: role and responsibilities of the liquidity manager, asset liability management, managing an MFIs bank relationships; Margins and transfer pricing: Traditional total margin concepts, matched rate transfer pricing, practical issues for MFIs, managing with transfer price incentives.