Technical Assistance Facilities

RISK MANAGEMENT FACILITY (RMF)

In February 2008, Omtrix launched the Risk Management Facility, a donor-funded technical assistance facility that will provide tools and training to microfinance institutions (MFIs) in Latin America and the Caribbean that address common financial risks.
The Risk Management Facility will principally address Market Risk, Credit Risk, Liquidity Risk, and Operational Risk and will seek to adapt international standards, such as the methodologies put forth in the Basel II Accord, to the needs and realities of regulated and unregulated microfinance institutions in the region. Omtrix is responsible for both the structuring and fundraising for the facility. The financial plan for the facility was completed with funding from highly respected industry participants such as the State Secretariat for Economic Affairs (SECO), Calmeadow, Appui au Dévelopment Autonome (ADA), DOEN Foundation (DOEN), and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO). Total funds committed amount to US$2,200,000. These funds will be used to make technical assistance available, under a cost-sharing scheme with participating institutions, to close to 50 MFIs over the course of five years.

TECHNICAL SERVICES FACILITY (TSF)

Omtrix is also responsible for managing a, US$ 780,000 Technical Services Facility (TSF), which has performed an institutional diagnostic and produced risk management plans for 51 MFIs in thirteen different countries in order to improve the MFIs’ ability and level of preparedness to cope with future liquidity crises.
The TSF’s program includes a diagnostic assessment of the institution, which reviews the institution’s level of preparation to withstand exogenous events. The diagnostic assessment includes an analysis of vulnerabilities and threats, both at the institutional level and in terms of the geographical concentrations of clients. Based on this analysis, the TSF works with the MFI to prepare a short and long-term plan to address and mitigate institutional and client vulnerabilities.  Finally, the TSF provides partner MFIs with a disaster recovery plan and associated tools the institution can use in the days immediately following a disaster to better secure the institution’s employees, clients, and physical assets. 
In the last evaluation of the TSF, carried out in November 2008 by an independent consultant, the following is mentioned: “The TSF has performed well within the original parameters and was able to provide technical assistance guidance in emergency preparedness to all 51 of ELF’s pre-qualified MFIs in 13 countries. This was achieved within the defined life span of 4 years and within the budgeted total cost of $780,000. The TSF was implemented in a highly cost-effective manner and has benefited most MFIs in a general sense through awareness-building and in a specific sense in determining vulnerabilities and providing specific tools to mitigate the associated risks.”
Mrs. Loira Cruz, Operations Manager of León 2000, in Nicaragua, described her experience with TSF as follows: “This was the best technical assistance we have ever received…. The consultants worked diligently.… The topic of this consultancy is what microfinance is all about, microfinance with social responsibility, concern for the environment as well as the money.”

CARIBBEAN TECHNICAL SUPPORT FACILITY (CTSF)

The Caribbean Technical Support Facility (CTSF) offers natural disaster prevention and risk management technical assistance to MFIs in the Caribbean. The Facility has financial commitments of US$630,000, provided by the Multilateral Investment Fund (MIF) of the IADB and the Caribbean Development Bank (CDB), and it is managed by OMTRIX/ELF.
The CTSF was created to extend the methodologies developed through OMTRIX’s experience managing the TSF [link] to a greater number of MFIs in the Caribbean, a region especially prone to natural disasters.  The CTSF is designed to serve smaller and less developed MFIs, that do not qualify for ELF, but whose clients are none the less vulnerable to natural disasters, especially floods and hurricanes. 
The CTSF operates in a similar manner to the TSF.  Caribbean based, expert consultants, trained to implement the program, conduct an institutional diagnostic that identifies key threats and vulnerabilities of the institutions and its clients.  Based on this analysis, the CTSF prepares short and long-term plans for the MFI to increase its level of disaster preparedness and mitigate threats.  In addition, the CTSF provides the institution with a contingency plan for use immediately following a natural disaster, which is designed to help the MFI assure the safety of employees and clients and secure the physical assets of the institution.