Risk is inherent in the delivery of financial services. Banks and MFIs mainly use a scattered approach in risk management, often only focusing on financial risk management or parts of it. However, it is important for financial institutions to implement a systematic risk management approach.
We help financial institutions to strengthen their risk management systems to better reflect their business strategy by using an integrated risk management approach. Our approach a best-practice framework for risk management in the microfinance sector. It is the product of extensive research and development, institutional pilot testing, and consensus building by diverse microfinance industry players and microfinance risk experts with years of experience.
Why use our risk management framework?
- It uses an integrated risk management approach
- It provides best-practice standards for risk management for banks and MFIs, based on their level of maturity, size, complexity, and structure, as well as the economic significance of their activities and risk profile
- It comes along with an easy applicable assessment tool to identify gaps between the model and the institutions’ actual risk management practices
- It addresses all relevant risk and risk related topics (strategic risk, credit risk, financial risk, operational risk)
- It provides guidelines on what kind of policies, tools and limits the banks and MFIs should have in place
- It provides a helpful starting point for planning and ongoing monitoring