FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

FINALS QUIZ IN RISK MGT IN MICROFINANCE

1. WHAT ARE THE KEY RISKS IN MICROFINANCE?

2. HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE, ENUMERATE THE WAYS.

3. GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

WHAT ARE THE KEY RISKS IN MICROFINANCE?

INTERNAL: INSTITUTIONAL-SOCIAL MISSION, COMMERCIAL MISSION, DEPENDENCY

OPERATIONAL-CREDIT, FRAUD, ERROR, SECURITY,

FINANCIAL MGT:ASSET&LIABILITY, INEFFICIENCY, SYSTEM INTEGRITY

EXTERNAL: REGULATORY, COMPETITION, DEMOGRAPHIC, PHYSICAL ENVT.,MACROECONOMIC,

POLITICAL/GOVT, REPUTATION

HOW CAN INTERNAL CONTROLS AND INTERNAL AUDITS BE EFFECTIVE:

In order for internal controls and internal audits to be effective, particularly for growth and
expansion, the following elements must also be present in your MFI:

• Stated mission and core values • Strong Board leadership and commitment towards the mission,
and to control systems • Honest and capable employees • Conducive environment • Sound
methodology • Accountability and transparency • Security • Performance and efficiency • Clear
delegation and segregation of duties • Reliable management information system

GIVE ATLEAST 2 INSTITUTIONAL ROLES AND ITS RESPONSIBILITIES TO RISK MANAGEMENT

Process Steps Institutional Role Responsibilities

Senior Management Identify major risks 1. Identify risks

Board Review and approve risk management

Senior Management Develop measurement indicators. Set acceptable range for risk.

2. Develop strategies to prioritize risks

Board Approve indicators and range. Monitor results.

Senior Management Design operational policies, systems, and guidelines to reduce risk. Provide
clear instructions for procedures to implement policies.

3. Design policies and procedures to mitigate risks

Board Approve operational policies.

Senior Management Assign responsibility for implementation.

Branch Management Implement control procedures. Monitor compliance.

4. Implement controls and assign responsibility

Operating Staff Provide input on appropriateness of policies and procedures. Offer suggestions for
policies needed. Comply with established policies.

Board and Management Review results of operations. 5. Test effectiveness and evaluate results
Internal Audit Staff Monitor compliance with policies. Identification of weaknesses in the risk
management process

6. Revise policies and procedures as necessary Repeat the steps above for new policies and
procedures