We also need to be mindful of the large differences between microfinance activities and microfinance institutions from one country to another. For instance in Brazil, a popular form of microfinance is the use of correspondent banking, or in other terms “branchless banking”.
When setting up the bridge institution, we can also benefit from our experience in bank resolution. The last instrument is asset separation. This allows us to transfer assets, rights or liabilities to a semi‐ publicly owned asset management vehicle. In the banking sector, this vehicle is also known as the “bad bank”.