Course objective:

Risk Management, Internal Control and External Audit of Microfinance Institutions Strengthening the MFIs’ internal control and audit policies and procedures to ensure that the institutions are able to mitigate risks properly and timely and are able to satisfy the regulatory requirements have become highly imperative. This is because of the strategic role that the MFIs play in the economy when creating wealth. This Course will help microfinance institutions to develop and improve the quality of their risk management processes, internal audit functions, effective internal controls and their external audit.

Course audience:

This Course is suitable for Operations Supervisors/Managers, Internal Control Officers and Branch Managers of MFIs.

Course Contents:

RISK MANAGEMENT

• Overview of risk and why risk management?
• Fraud and Impact of fraud in Microfinance program operation
• Importance of pro-active risk management
• Dimensions and measurement of risk;
• Risk management process
• Operational, financial and strategic risks management.
  • Credit Risks
  • Financial Risks
  • Operational Risks

CREDIT RISK MANAGEMENT  

• Definition of credit risk
• Credit process in microfinance
• Portfolio treatment
• Categories of credit risk
• Credit risk for different market participants
• Portfolio quality analysis
• profitability analysis
• loan enforcement practice
• loan rescheduling and refinancing practice
• loan portfolio management

FINANCIAL RISK MANAGEMENT 

• interest rate management
• price management
• exchange rate management
• cash flow management issues
• value chain financing
• country risk assessments and management
• liquidity and funding of MFIs management and analysis

OPERATIONAL RISK MANAGEMENT

• Fraud and integrity management
• Information and technology management
• Operational audit
• Financial audit
• Staff training operational manuals

FUNDAMENTALS OF RISK MANAGEMENT METHODS AND TOOLS

• How to assess risks and Identify warning signs
• Establishing the context of risk management in microfinance field
• Risk description
• Risk identification tools
• Analysis & evaluation
  • Qualitative analysis & evaluation
  • Quantitative analysis & evaluation
• Designing strategies and system to suit the organization
• Setting of risk appetite and tolerance levels by the board
• Do’s and don’ts of external risk management in microfinance business environments
• The role & responsibilities of directors and board with respect to risk management
• Reporting to review progress in addressing exposures
• Getting relevant support and commitment from top executives
• How to prevent and mitigate fraud risk?
• Designing and implementing internal control processes
• Understanding internal controls and internal audit for fraud control
• Carrying out effective external audit for MFIs.
• Some tools and techniques to support decision making and risk management;