We are of the understanding that an active management of the risks borne by micro-finance banks and financial cooperatives is critical to their ability to remain financially sustainable and achieve target development impact(s). Our advocacy group has developed a comprehensive enterprise risk management framework within which risks are continually identified, measured, monitored, analyzed and controlled. This ERM framework will be deployed to all non-bank micro-finance institutions. We will be partnering with Association of Non-bank Micro-Finance Institutions (ANMFIN) to attain a national spread for this project.
We have helped and will continue to help financial cooperatives understand the Key Risk Management Principles as listed below
• The effective balancing of development impact, risk and reward;
• Ensuring business decisions are based on an understanding of risks;
• Being extremely selective in undertaking activities which may result in adverse reputational impact; and
• Shared responsibility for risk management across the entities.
Our desire is to help financial cooperative balance their risk appetite and tolerance. We will work with select financial cooperatives to translate risk appetite and tolerance into limits, policies, procedures and directives. We work and will continue to work with them to regularly measure, monitor and evaluate their risk profile to ensure that both individual and aggregated risks remain within the ranges deemed acceptable.