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MACDI - Training Workshop of Risk Management in MFIs
Event type: Training Workshop
Location: Hanoi, Vietnam
Time: 02-04/10/2011
COURSE OVERVIEW
Financial institutions have been formally managing their risks from inception. But the perception of risk management is fundamentally changing within these institutions. No longer is it seen purely as a control mechanism – but as a critical input into the basic business question: am I earning enough revenue out of this transaction to compensate me for the additional risks I am taking on?
This concept permeates all the leading financial institutions. Every transaction needs to be assessed in terms of the increase in risk to the institution, with the assurance that the pricing of that transaction will generate a suitable return. Budgets should be allocated, and performances measured, on the basis of revenue earned per unit of risk generated. Such a risk culture is reinforced by the new Basel Accord, due to be implemented in many countries by the end of the decade. This requires the banks to allocate regulatory capital against the major components of risk, using regulatory or, more likely, internal models.
In the current economic downturn, many financial institutions lost large amounts of money and had to be assisted by governments. Was this a failure of risk management, and if so, why? This course will discuss what happened, and how some institutions actually came out of the credit crisis with enhanced reputations.
This three-day course helps microfinance institutions develop and improve the quality of their own risk management processes and focuses on problem prevention and early problem identification and control. Participants are provided with guidelines for establishing operational activities that assist an MFI to identify its vulnerabilities, design and implement controls, and monitor the effectiveness of controls. Through exercises, group discussions, and case studies, participants review concepts such as internal controls, fraud, and internal and external audit.
COURSE OBJECTIVE
- Analyze the historical volatility of foreign exchange (FX), interest rate and deposits in order to better understand the reasons for these variables’ behavior.
- Construct measurements of FX, interest rate, and liquidity risk.
- Devise stress scenarios and tests for FX, interest rate, and liquidity risk.
- Quantify the tradeoff between risk and reward in order to define their institution’s risk appetite.
- Set limits for FX, interest rate, and liquidity risk levels, and understand some strategies to monitor and limit these risks.
- Develop all necessary reports to monitor risk limits.
- Analyze a balance sheet for inherent asset and liability risks, with a focus on liability management.
- Create an aggregate risk profile and internal audit schedule.
- Describe the skills necessary for managers involved in financial risk management.
- Define the roles and responsibilities of different committees such as the asset liability committee (ALCO) or Risk Management Committee, with regard to asset liability and financial risk management.
COURSE OUTLINE
- Risk Management
- The key areas of risk for an MFI
- Risk management – components and definitions
- A systematic process for risk management
- Preventive, detective, and corrective controls
- We Are the Institution
- Mission and core values of an MFI
- Institutional values and their relation to an MFI’s operations
- Barriers to institutionalizing values
- The role of people in risk management
- Key elements in effective risk management
- Tools for Risk Management
- Human Resource policies and mitigating risks
- Preventive actions to mitigate risks
- Proper separation of job functions
- Using policies and procedures to mitigate risks
- The critical role of the information system in risk management
- Business Cycles, Risks, and Internal Controls
- Mitigating Risks – Implementing Corrective Controls and Moving Forward
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- Using the cycle approach to identify risk areas and need for internals controls
- Objectives and purpose of internal controls
- Characteristics of effective controls
- Limitations of IC and how to compensate for them
- Internal Audit
- The difference between internal and external audits
- The role of internal audit in the internal control system
- Characteristic internal audit activities
- How to use internal audit results
- External Audit
- The role of external audit in risk management
- Planning and coordinating external audit activities
- Formulating terms of reference (ToR) and establishing scope for an external audit
- Selecting quality external auditors
- Evaluating audit results and planning for appropriate corrective action
1. Corrective controls and their role in risk management
2. The dynamic process of risk management
- Action Plan, Evaluation, and Closure
INTENDED AUDIENCE
This course is recommended for Executive Directors, Finance Managers, Credit Managers, Credit Officers, Operation Managers, Branch Managers, and Board Members from Microfinance NGOs, credit unions, banks, and other financial institutions.
TRAINING METHOD:
This course will combine 3 main methods include:
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- Participant get centered : All training activities have taken participant to the center with training methods open discussion, flexible, non-imposing;
- Training with co-participate methods: improving ability, knowledge of participant and encourage learning from the two. The training with co-participate will create opportunities to trainer can guide to monitor directly and give detail instruction for each participant in this course to apply into their work. Creative and brain storming;
- Learning through experience and case study exercise: The process of work will allow participant to self-design and operation management for organization with high practice to develop organization and improving capacity.
FACILITATORS
Dr. Do Thi Kim Hao is a financial and economic specialist with 18 years experience in working within the financial service and economic development industries. She has extensive knowledge in the areas of education, training and development, as well as financial and economic policy reform, financial and economic appraisal, investment theory, risk management, credit assessment, project finance, and micro-enterprise finance. She has assessed training needs of financial service companies and designed and developed training products and services that address the training needs identified. In addition she has published articles on such topics as Interest Rate Risk in Vietnam Commercial Banks, Re-pricing Model for measuring Interest Rate Risk, Using Financial Derivatives to hedge Interest Rate Risk, and Financial Investment and Loan Program in Japan for such publications as the Banking Science & Training Review and the Banking Review
MA. Trần Thị Thanh Hương (chia sẻ kinh nghiệm) is an expert in risk management in Banking. She has 5 year working experience in the position of Head department of Risk Management with Viet Nam Bank of Agriculture and Rural Development. She used to be chief development of Microfinance Project with the bank of Agriculture & Rural Development Bank.
Program detail:
Venue: Hà nội
Language : Vietnamese
Dated : 02-04/10/2011
Size: Maximum is 30 people.
CERTIFICATE
The participants who attend fully 3 day training course will be awarded a certificate of the training course from Microfinance and Community Development Institute
COURSE FEE
Participants will contribute a fee of 280$/ per person (This course fee will be include only lunch throughout whole training course but not include transportation, accommodation and other expenses of participants)
Payment of the fee: By cash or bank transfer to MACDI’s bank account at least 3 days before the course started.
Bank account information detail:
Account name: Viện tài chính vi mô và phát triển cộng đồng
Account number: 11025487 – Tại ngân hàng VP bank chi nhánh 152 Thụy Khuê, Hà nội
Further information, please contact:
Mrs.: Nguyễn Diễm Phương
Phone: 043.7590344
DĐ: 0983757122
Email: macdivn@gmail.com
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