Microfinance business is generally seen as a risky venture and risk management is becoming more critical in the microfinance industry, partly due to: the weaknesses in major processes, peoples, systems, its dynamic features and the inefficient financial market causing volatile market conditions.

Using a microfinance institution of your choice, you are required to;

A) Explain with relevant examples, the type of risk facing the institutions.

B) Demonstrate three (3) ways by which you can manage the risk in question.

focusing on Liquidity risks