MICROFINANCE INSTITUTIONS:

RISK MANAGEMENT AND INTERNAL CONTROL

(CHALLENGES/ISSUES/RISKS AFTER COVID19)

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMNETS

OF THE POST GRADUATE DIPLOMA IN MANAEMENT

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA

BY
SHILPI KUMARI
[DD/MM/2020]

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA

SYNOPSIS
Breif note

Chief motivation

Problem statement

Theoretical framewwork

Methodology

Findings

Recomendations
 DECLARATION

I hereby declare that the Summer Internship Project entitled “Microfinance Institutions: Risk

Management And Internal Control (Challenges/Issues/Risks After Covid19)” submitted to

Chandragupt Institute of Management Patna in partial fulfilment of the requirements for the

award of Post Graduate Diploma in Management is my original work and has not been submitted

earlier, either to any other Institute or University for the award of any diploma, degree or

certificate. I have followed the CIMP guidelines to prepare the report. I have also given due

credit to the sources of data, theoretical analysis, text and other materials by citing them in the

text of the report and producing the details in the reference section.

Sign Of Student

Name:-

Roll No:-

Place:-

Date:- DD/MM/2020
 CERTIFICATE BY FACULTY GUIDE

This is to certify that the work incorporated in this Summer Internship Project entitled

“Microfinance Institutions: Risk Management And Internal Control (Challenges/Issues/Risks

After Covid19)” by Ms Shilpi Kumari bearing Roll no 120102, comprises the results of his/her

independent and original investigations carried out under my supervision and guidance in partial

fulfillment of the requirements for the award of Post Graduate Diploma in Management. To the

best of my knowledge, the work has not been submitted earlier, either to any other Institute or

University for the award of any diploma, degree or certificate.

Place: Faculty Sign

Date: Faculty Name:

ACKNOWLEDGEMENT
CONTENT
 ABBREVIATION

MFIs- Microfinance Institutions

 1. INTRODUCTION

Microfinance – It refers to small sized loans, savings, insurance or other financial services

that are offered to low income households and individuals. The idea of microfinance came

from the understanding that people of low income group are unable to develop economically

without small financial help. Microfinance services can be used for a wide range of

activities like growing business, building assets, and managing risk just like people of good

income are able to do. Further, microfinance allows low income classes to develop

themselves financially without coming in trap of informal moneylenders and debt collectors

who pose higher risk to borrowers.

Microfinance is not a new concept. It has been existing since 18 th century. The first

occurrence of micro lending was done by Jonathan Swift to improve conditions for Irish

citizens. In modern era, microfinance became popular on large scale in 1970s by

Bangladeshi economist Mohammad Yunus. When he came to his country from USA after

receiving his Ph.D., he saw massive poverty throughout the region which developed an idea

to introduce new economic approach to improve local economy. With this intension he setup

Gramin Bank with the objective to help poor people escape from poverty by giving them

small loans to start or grow business. As of November, 2019, it has 9.60 million members, 97

percent of whom are women. With 2,568 branches, GB provides services in 81,678 villages,

covering more than 93 percent of the total villages in Bangladesh. The GRAMIN BANK

microfinance program became model for the rest of the world. the World Bank estimates that
more than 16 million people are served by some 7000 microfinance institutions all over the

world.

Microfinance in India

Microfinance in India started in 1970s through the emergence of informal self-help group formed

SELF EMPLOYED WOMEN’s ASSOCIATION (SEWA Bank) with the objective to provide

banking services to poor women employed in unorganized sector in Ahmadabad. To provide

credit for promotion of Agriculture, small-scale Industry, cottage and village industries etc in

rural area which comprised nearly 80% India’s population NABARD came into existence. Post-

1991, there was strong growth numbers due to liberalization of the economy and increased

lending by private sector organizations. Between 2005-2010 Microfinance sector grew

consistently due to high demand for loans from borrowers. However, in 2010, the Andhra
Pradesh crisis and State government ordinance to restrict the activities of microfinance

companies slowed the growth of the industry. This crisis triggered a series of regulatory changes

by RBI in the following years. Between 2014-2017 Microfinance sector has also seen many

changes like seting up of BANDHAN BANK, DEMONETISATION, MUDRA YOJNA BFIL

MERGER.

Every profit as well as nonprofit making organization has its objectives and goals to achieve. For

any organization to carry its business smoothly there as some factors to keep in mind and work

on it. Every organization has internal as well as external risk which they have to overcome. And

also to achieve their goals and objective, they have to control their operations.

Risk and Risk Management

Managing risk is a complex task for MFIs and is important to minimize losses that occurs or

might occur.

Effective Risk management system has several benefits like early warning signal for any kind of

potential threats, efficient resource allocation and helps in identifying positive opportunities. It

allows senior managers and directors to make conscious decisions about risk.

Major risks to MFI:-

 Financial risks,

 Operational risks

 Strategic risks.

Most risks fall under one of three categories: Financial risks, operational risks and strategic risks.
Most MFIs focuses on financial risks like credit risk, liquidity risk, interest rate risk, investment

risk etc.

Operational risk arises from human or computer error within daily product delivery

and services. This risk is a function of internal controls, information systems, employee integrity,

and operating processes. Operational risks focuses on two types of risk: Fraud risk and

Transaction risk.

Transaction risk is high for MFIs that handle a high volume of small transactions daily. Fraud

risk arises due to loss of earnings or capital as a result of intentional deception by an employee or

client. The most common type of fraud is the direct theft of funds by loan officers or other

branch staff. Other forms include the creation of misleading financial statements, bribes, etc.

Strategic risk focuses on governance risk, reputation risk and External Business Risks. Strategic

risks include internal risks like those from adverse business decisions or improper

implementation of those decisions, poor leadership, or ineffective governance and oversight, as

well as external risks, such as changes in the business or competitive environment.

Apart from the above mentioned risks, MFIs face additional risks resulting from rapid

growth, management succession, and new product development.

INTERNAL CONTROL SYSTEM

The COSO framework1 defines internal control as “a process, effected by an entity’s board of

directors, managements, and other personnel, designed to provide reasonable assurance for the

achievement of organisational objectives under: Effectiveness and efficiency of operations;

Reliability in financial reporting and Compliance with applicable rules and procedures”.
According to statement of accounting standards, (SAS, No 55) internal control is the combined

plan, method and procedures which can safeguard the firm’s assets, promote operational

efficiency and encourage adherence to prescribed policies.”

It plays an important role in achieving goals and objective and also in preventing and detecting

fraud and protecting the organization's resources, both physical (e.g., machinery and property)

and intangible (e.g., reputation or intellectual property such as trademarks).

The Committee of Sponsoring Organizations of the Tread way Commission (COSO, 1994),

AICPA (American institute of certified public accountants) and General accounting office

(GAO) claim effective internal control should have five elements namely:

1. Control environment

2. Risk assessment

3. Control activity

4. Information and communication

5. Monitoring

Control environment establishes an atmosphere in which people can conduct their activities and

carry out their control effectively. It reflects the contribution by the board of director and

management towards the necessary discipline and the appropriate structure for ensuring proper

internal controls over the organization operation.

Following are some of the components of an effective control environment

 Commitment to integrity and ethical values

 Establishment of standard of conduct and adherence to it

 Accounting and financial management system.

 Closely monitoring of internal control system by management.

Once an effective control environment has been established, management should assess the risks

to achieve its objectives. Internal control provides for an assessment of risks the agency faces

from internal as well as external sources. Risk assessment can be done through supervision and

guidance by defining appropriate objectives for the organization, identifying risks, ascertainment

of fraud-related risks to the organization.

Control Activities includes all the policies, procedures, techniques, and mechanisms (the day-to-

day processes) management delegates and enforces to address known or perceived control risks

based on the Risk Assessment. It includes segregation of duties, designing information

technology infrastructure, corrective actions to address the weakness, training of staff etc.

Information and communication involves the procedure of identifying, capturing and exchanging

information on timely basis to enable the organization to achieve its objective. It includes

identification of information requirement, internal and external communication etc.

Monitoring is the process to assess the quality of internal control performance over time. It

involves assessing the design and operation of controls on regular basis and taking corrective

measures if required.
 2. LITERATURE REVIEW

Ramakrushna Mahapatra and Sunita Patra in their paper titled “Micro-finance and Its role

in India” looked at the growth and transformation of microfinance institution in India with

different features in providing services. They discussed about the structure of microfinance

institutions in India and how it penetrate into the poverty and downtrodden segment. They

discussed differentiating factors of MFIs like lending model, repayment structure, product

offering etc. They found that there is absence of regulatory control in India and interference of

political sensitivity in the MFOs. They concluded in their paper that there should be regulatory

changes that allow smaller MFOs to get into more complex forms as they grow organically.

NGO-MFIs should get chance to invest in the equity and debt as these are larger enough to

maintain adequate leverage ratio and able to raise capital as NBFCs. The key factors that can

drive success for MFIs are robust systems, efficiency and productivity levels, maintaining asset

quality, prevention of credit losses and capital erosion and remaining adequately capitalized to

fund growth plans.

Jonathan Morduch and Stuart Rutherford in their paper titled, “ Microfinance: analytical

issues for India” analysed about poor households facing constraints in trying to save, invest,

and protect their livelihoods. users. Research shows that poor people value financial services,

want more of them and worry when they don’t have them, but are often frustrated by them when

they do get them. They know that managing money is important, and managing money will give

them a better chance to manage their lives and livelihoods well. The researcher analyzed the

analytical issues, and steps taken to overcome those issues of MFIs in India with MFIs in
Bangladesh. They discussed how Bangladesh and Indonesia arrived at the beginning of the new

century with booming, expanding, good-quality yet still-improving microfinance reaching large

proportions of its poor populations. They concluded that in past few years India has

demonstrated a willingness to innovate and to think afresh about financial services for poor

people. Lessons from Bangladesh and Indonesia guides for better solutions which include

Necessary steps: raising interest rates well above “cheap credit” levels (no matter what one’s

view on subsidy); clearly targeting customer groups (whether by product design, location, or

explicit eligibility criteria; managing and rewarding staff according to their performance

ASHENAFI JEMAL HUSSEN (2017) in his paper “Assessment of internal control system

in selected micro finance institution in Addis Ababa.” Focused on assessment of the internal

control system in the micro finance institution to know the possible areas of deficiencies in the

system. The population for the study was made of the nineteen micro finance institutions in

Addis Ababa of which three of them were selected as a sample. The data gathered from the

respondents were analyzed and interpreted with the help of bar frequency table, minimum &

maximum value, mean and standard deviation. He came to the observation that though risk

assessment elements with the average mean value of 3.81 is better in the institution, there is

effective control environment, information and communication, control activity, and monitoring

activity components in the institution. He concluded that the control environment concerned

majority of respondents. Majority of respondents nearly agreed that in the practice of control

environment, elements include integrity and ethical behaviour in the work place, formulation of

organizational structure, formulation of standard code of conduct, establishment of competence

in every position and creating accountability in execution of internal control activities. The
researcher further recommended, it is possible to improve internal control effectiveness through

continuous monitoring, assessing changing risks, designing sound control methods, and with

good communication in the organization.

Yvonne Mawuko-Yevugah in his paper “BANKING THE UN-BANKABLE: AN

EMPRICAL STUDY OF RISK AND RISK MANAGEMENT BY MICRO-FINANCIAL

INSTITUTIONS IN GHANA” explores the risks that microfinance institutions (MFIs) face in

their operations and the risk management strategies they adopt to mitigate their risks. The data

for this study was from both secondary and primary sources; 48 MFIs in Ghana were chosen for

the survey. The Analysis found that the MFIs surveyed were aware of the types of risk inherent

in their line of business and employ some form of risk management strategies to mitigate losses

and enhance profitability. The conclusion drawn from the study was, for effective risk

management, there is the need to deploy a combination of risk management strategies. The

current system where various managers adopt different risk management strategies may not

advance the long-term objectives of all stakeholders, including clients and the government.

While there have been attempts to transform MFIs through the implementation of specific policy

reforms and the passage of specific legislations, more needs to be done to integrate the MFIs

with banking and financial system if the gains made so far are to be sustained.

SANGEETHA S (2017) in her paper titled “Assessment of credit risk and financial

sustainability of Indian microfinance institutions an empirical study” focused on understanding

the credit risk levels of top five Indian Microfinance Institutions based on a gross loan portfolio

for financial year 2-12-2013. Morgan Stanley‘s credit risk assessment and Altman‘s Multi
Discriminant Analysis methodology is adopted for the purpose of analysis. The study analyses

the Credit Risk, Solvency, Sustainability and Profitability of MFIs for 10 years. Stratified

random sampling has been opted to choose the samples. The conclusion drawn from the study

was that all the companies taken for study do not satisfy the credit score requirements. But 60%

of the respondents shows better solvency position during the study period.

3. METHODOLOGY

Objective: -

The main objective of the study is

 To understand the types of risk faced by MFIs in India and the mechanisms or steps or

strategies adopted by these institutions to minimize or manage those risk.

 To know the opinion of institutions on role of internal control system on reducing the

risk faced by the organization.

 To understand the internal control components used within the organization and steps or

mechanisms adopted for internal control process.

 To get opinion of institutions on the impact of risk management & internal control

system on performance of organization.

 Challenges/issues/risks that will be faced by MFIs in India after covid19

Limitations

 This study would be more productive if it were conducted on all MFIs in India. Due to

time limit and other constraints it was difficult to get in touch with more MFIs.

 Limited research work and articles on the topic in India, to further work on this topic

other countries articles were also taken for the study.

  Unwillingness of some respondents to participate in the survey due to no direct contact,

fear of leak of data.

Source of data

Help of both primary as well as secondary data is taken in for the study. Secondary data are

taken from newspaper articles, blogs, literature reviews and research paper. Primary data were

collected from survey method. A structured questionnaire was therefore designed to collect the

data.

Data analysis and interpretation

This research has used data collected with the assistance of structured questionnaire and

thus, followed a survey method. This makes this study descriptive in nature. The result is

presented by using statistical tools such as frequencies and percentages.

The analysis tool for the study is MS Excel(2016).

Sampling and data collection

To achieve the objective of the study, a thorough literature review was carried out. The data was

collected from 60 employees working as branch manager, regional manager, head of risk

department, head of audit department and staffs in internal audit and risk department into 20

different Microfinance Institutions (table 2) based in India. This makes the sample representative

of the target population. The investigation uses random sampling technique of data collection for

the working executives. Questionnaires were distributed to these employees in person. Finally,

dully filled responses were 60 out of 110 which have been used for the study, this makes the

response rate of 55%.

 4. RESULT AND DATA ANALYSIS

Name of organization List of Respondent

Bandhan Bank Ltd 3

Dakshin Bihar Gramin Bank 1

Equitas Small Finance Bank 4

Janalakshmi Small Finance Bank 2

L&T Financial Services 1

Muthoot Microfin Ltd 1

Pahal Financial Services Pvt Ltd 1

Saija Finance Pvt Ltd 2

Samasta Microfinance Limited 14

Samunnati Agri Trade Solutions Pvt Ltd 1

Satin Creditcare Network Ltd 1

Satya Microcapital Ltd 2

Sindhuja Microcredit Pvt Ltd 1

Spandana Sphoorty Financial Ltd 1

Svatantra Microfin Pvt Ltd 3

Taraashna Financial Services Limited 1

Ujjivan Small Finance Bank 4

Utkarsh Small Finance Bank 15

Vaya Finserv 1

Vedika Credit Capital Ltd 1

Grand Total 60

Table 1: List of organizations

 Table 2: Profiling of the respondents

Characteristics Frequency Percent

Gender Male 20-40 years 44 77%

40-49 years 1
50+ years 1
Female 20-40 years 14 23%
40-49 years -
50+ years -

Less than 5 years 57 95%

Experience
Between 5years- 10years 3 5%

More than 10 years - -

Graduation 9 15%
Education
MBA Finance 1 2%
Attainment of
respondents Post Graduate 50 83%

Non-NBFCs 28 47%

Legal Status NBFCs 32 53%

Internal control components is used within your organization Frequency Percentage

most frequently

Internal audit 36 60%

Supervision 7 12%
 Information and communication 1 2%
Monitoring 13 22%
All of the above 3 4%
Grand Total 60 100%

Internal Control System

Table 3

Table 4

Ranking to the extent to which organizations controls the environment through internal audit.
 Accounting and financial management system Frequency Percentage

1- Very great extent 39 65%

2- Great extent 14 23%

3- Moderate extent 5 8%
4- Little extent 1 2%

5- No extent 1 2%

Management closely monitors implementation of internal Frequency Percentage

control systems

1- Very great extent

36 60%
2- Great extent 18 30%
3- Moderate extent
4 7%
4- Little extent
1 2%
5- No extent 1 2%

Ethical values are upheld in all management decision Frequency Percentage

1- Very great extent

30 50%
2- Great extent 26 43%
3- Moderate extent
2 3%
4- Little extent
1 2%
5- No extent 1 2%

Table 5

Rank the extent to which your organization’s management is involved in risk assessment through
supervision
 Management has defined appropriate objectives for the Frequency Percentage
organization
1- Very great extent
35 58%
2- Great extent 18 30%
3- Moderate extent
4 7%
4- Little extent
2 3%
5- No extent 1 2%

Management identifies risks that affect achievement of the Frequency Percentage

objectives

1- Very great extent

35 58%
2- Great extent 14 23%
3- Moderate extent
8 13%
4- Little extent
2 3%
5- No extent 1 2%

Management has criteria for ascertainment of fraud-related Frequency Percentage

risks to the organization

1- Very great extent

30 50%
2- Great extent 26 43%
3- Moderate extent
2 3%
4- Little extent
1 2%
5- No extent 1 2%

Timely evaluation of risk Frequency Percentage

1- Very great extent

35 58%
2- Great extent 18 30%
3- Moderate extent
4 7%
4- Little extent
3 5%
5- No extent - -
Table 6

Ranking to the extent to which your organization practices the following control activities
Corrective action is taken to address weakness Frequency Percentage

1- Very great extent

30 50%
2- Great extent 25 42%
3- Moderate extent
2 3%
4- Little extent
1 2%
5- No extent 2 3%

Staffs are trained to implement the accounting and Frequency Percentage

financial management system
1- Very great extent
31 52%
2- Great extent 19 32%
3- Moderate extent
8 13%
4- Little extent
1 2%
5- No extent 1 2%

It is impossible for one staff to have access to all Frequency Percentage

valuable information without the consent of senior
staff
1- Very great extent
23 38%
2- Great extent 22 37%
3- Moderate extent
11 18%
4- Little extent
4 7%
5- No extent 23 38%

Table 7

Ranking to the extent to which the following statements relate to your organization ‘information and
communication system

Management has identified individuals who are responsible Frequency Percentage

for coordinating the various activities within the entity
1- Very great extent
36 60%
2- Great extent 17 28%
3- Moderate extent
4 7%
4- Little extent
2 3%
5- No extent 1 2%

Communication helps to evaluate how well guidelines and Frequency Percentage

policies of the organization are working and being
implemented
1- Very great extent
34 57%
2- Great extent 20 33%
3- Moderate extent
4 7%
4- Little extent
1 2%
5- No extent 1 2%
Table 8

Ranking to the extent to which the following statements relate to your organization “monitoring
procedures

There are independent process checks and evaluations of Frequency Percentage

control activities on regular basis.
1- Very great extent
36 60%
2- Great extent 16 27%
3- Moderate extent
6 10%
4- Little extent
1 2%
5- No extent 1 2%

Internal reviews of implementation of internal controls in Frequency Percentage

units are conducted periodically
1- Very great extent
35 58%
2- Great extent 17 28%
3- Moderate extent
5 8%
4- Little extent
2 3%
5- No extent 1 2%

Monitoring has helped in assessing the quality of Frequency Percentage

performance of the organization over time
1- Very great extent
39 38%
2- Great extent 13 37%
3- Moderate extent
6 18%
4- Little extent
2 7%
5- No extent - -

Frequency
How do you examine the
performance within your Percentage
MFIs?

Asset Quality 1 2%
Customer satisfaction 1 2%
Degree of objective
attainment 18 30%
Performance 1 2%

Profitability 27 45%

Return on asset 5 8%

Return on equity 7 12%

(blank) 0%

Grand Total 60 100%

Count of Does the management closely

Row monitor implementation of existing
Percentage
Labels internal control system in your
institution?
Maybe 3 5%
No 2 3%
Yes 55 92%

(blank) 0%
 Grand
Total 60 100%

Count of Is there any need for

Row Labels internal control systems within
your organization?
Percentage
Maybe 11 18%
No 11 18%
Yes 38 63%
(blank)  

Grand Total 60 100%

Count of If
yes, why do
you think it
is needed to
institute
internal
control in
your
organisation Percentag
Row Labels ? e

All of the above 29 56%

All of the above except option 1 1 2%

As it is already in place 1 2%
Internal control brings out financial risk management to protect MFIs
against losses 9 17%
Internal control help prevent fraud and any fraudulent attitude 6 12%
Internal control leads to GROWTH OF THE ORGANISATION 3 6%
The MFI is in its embryonic (initial) phase, so there is need for sound
internal control to avoid losses 3 6%

(blank)  

Grand Total 52 100%

Count of Do you think good

internal control systems
increase the performance of
Row Labels your organization? Percentage

Yes 60 100%
(blank)  

Grand Total 60 100%

Count of At
what level
risk
managemen
t and
internal
control
decision in
your
organizatio Percentag
Row Labels n is made e
At branch level 7 12%
At branch level with the approval of head office 24 40%
At head office level 27 45%
It depends on situation be it branch , HO or anywhere
else 1 2%
Particular zonal office 1 2%

(blank)  

Grand Total 60 100%

Count of At
what level
risk
managemen
t and
internal
control
decision in
your
organizatio Percentag
Row Labels n is made e
At branch level 7 12%
At branch level with the approval of head office 24 40%
At head office level 27 45%
It depends on situation be it branch , HO or anywhere
else 1 2%

Particular zonal office 1 2%

(blank)  

Grand Total 60 100%

Count of Is there any risk

Percentag
management department in
e
Row Labels your organization

no 2 3%

yes 58 97%

(blank)  
Grand Total 60 100%
 Count of If
yes, who
does the
risk
managemen
t head Percentag
Row Labels report to? e

Area Manager 1 2%
CEO 5 10%
Chairman 1 2%

Chairperson 1 2%

Cheif Risk Officer (CRO) 1 2%

Chief risk manager 1 2%

Chief Risk Officer 1 2%

CMD 1 2%
CREDIT AND RISK HEAD 1 2%
Easily 1 2%

Fraud related any activity 1 2%

H.O.D. 1 2%
Head Office 6 12%
Head Office 1 2%
Higher authority of management 1 2%
HO 2 4%

Internal Auditor 1 2%

Kamlakanta Sir 1 2%
Manager 1 2%

Managing Director 2 4%

Managing Director and CEO 1 2%

MD 7 13%
MD 1 2%
Mr Prasahnat 1 2%

No 1 2%

Pintu kumar 1 2%

REGARDING FRAUD AND LOSS OF MONEY 1 2%

Regional office staff 1 2%

Regional operational manager 1 2%

Risk Head 1 2%

Risk Management Committee 1 2%

Risk management head 1 2%
Risk management head report to MD or board of
directors. 1 2%
Whole Time Director 1 2%
Zonal Office 1 2%

(blank)  
Grand Total 52 100%

Count of To what extent Financial Risks

Row Labels Percentage
impacts most to your organisation?
1 43 72%
2 8 13%
3 8 13%
4 1 2%
(blank)   0%
Grand Total 60 100%

Measures taken to control financial risk

Count of A routine process for

comparing concentrations of credit risk
Row Labels with the adequacy of loan loss reserves Percentage
and detecting patterns (e.g., by loan
product, by branch, etc.).
 1 30 50%

2 22 37%

3 5 8%
4 2 3%
5 1 2%
(blank) 0%
Grand Total 60 100%

Count of Delinquency is understood and

Row Labels addressed promptly to avoid its rapid Percentage
spread and potential for significant loss.

1 34 57%

2 19 32%
3 2 3%
4 4 7%
5 1 2%
(blank) 0%
Grand Total 60 100%

Count of Strict organizational control

Row Labels Percentage
over loan transactions
1 38 63%
2 13 22%
3 6 10%
4 2 3%
5 1 2%
(blank) 0%
Grand Total 60 100%

Count of Maintaining detailed estimates of

projected cash inflows and outflows for the next Percentag
Row Labels
few weeks or months so that net cash e
requirements can be identified.
 1 37 62%

2 16 27%

3 4 7%
4 1 2%
5 2 3%
(blank) 0%
Grand Total 60 100%

well designed borrower screening, careful loan Percentag

Row Labels
structuring, close monitoring e
1 38 63%
2 16 27%
3 3 5%
4 1 2%
5 2 3%
(blank) 0%
Grand Total 60 100%

Count of To what extent

Row Labels Operational Risks impacts Percentage
most to your organisation?

1 29 48%

2 24 40%
3 4 7%
5 3 5%
(blank)   0%
Grand Total 60 100%

Measures

Count of An inspection
unit that performs random Percentage
operational checks.
Row Labels
1 36 60%
2 15 25%
3 8 13%
5 1 2%
(blank)  
Grand Total 60 100%

Count of The use of

Row Labels preventive measures to Percentage
reduce fraud
1 34 57%
2 20 33%
3 4 7%
4 1 2%
5 1 2%
(blank)  
Grand Total 60 100%

Count of Adequate Loan tracking

Row Labels information, e.g. adequate credit Percentage
histories.
1 37 62%
2 18 30%
3 2 3%
4 2 3%
5 1 2%
(blank) 0%
Grand Total 60 100%

Count of Strong internal controls to

test and verify the accuracy of
Percentage
information and adherence to
Row Labels policies and procedures

1 36 60%
2 18 30%
3 4 7%
5 2 3%
(blank)  
Grand Total 60 100%

Count of To what extent

Row Labels Strategic Risks impacts most Percentage
to your organisation?

1 24 40%
2 25 42%
3 8 13%
4 2 3%
5 1 2%
(blank)    
Grand Total 60 100%

Measures

The institutional by-laws are clear and

Row Labels well written and accessible to all board Percentage
members

1 38 63%
2 16 27%
3 5 8%
4 1 2%
(blank) 0%
Grand Total 60 100%
 Count of Boards comprise the right mix
of individuals who collectively represent
Row Labels Percentage
the technical and personal skills and
backgrounds needed by the institution.

1 35 58%
2 18 30%
3 6 10%
4 1 2%
(blank)  
Grand Total 60 100%

Count of The institutional by-laws are

Percentag
Row Labels clear and well written, and accessible
e
to all board members

1 38 63%
2 16 27%
3 5 8%
4 1 2%
(blank)  
Grand Total 60 100%

Rank the following risk from most threatening to least threatening

Row Labels Count of Bad Debt Percentage

1 29 48%
2 17 28%
3 11 18%
4 2 3%
5 1 2%
(blank)  
Grand Total 60 100%
 Count of Lack of good Internal
Percentage
Row Labels control
1 27 45%
2 22 37%
3 8 13%
4 1 2%
5 2 3%
(blank)  
Grand Total 60 100%

Count of Percentag
Row Labels Fraud e
1 30 50%
2 17 28%
3 8 13%
4 5 8%
(blank)  
Grand Total 60 100%

Count of Lack
Percentag
of Affordable
e
Row Labels fund

1 17 28%
2 19 32%
3 13 22%
4 7 12%
5 4 7%
(blank)  
Grand Total 60 100%

Count of Cost effective

and most efficient way
used in the organisation
to lower the risk Percentag
Row Labels exposure e

Better loan management system 11 18%

Conservative credit policy 13 22%
Credit score model 6 10%
Effective internal control system 18 30%
Encouraging customer to take short term
loan 2 3%
Staff training 10 17%
(blank)  
Grand Total 60 100%

Count of
Which of
the
followin
g factors
are the
biggest
predicto
r of non
payment
of new
clients?
You can
choose
more
than one Percentag
Row Labels option e
Age 1 2%
Age;Gender;Income;Credit History 1 2%
Age;Gender;Income;Education;Credit History;Amount of loan;all of the
above 1 2%
Age;Income;Credit History;Amount of loan 2 3%
all of the above 6 10%
Amount of loan 7 12%
Credibility 1 2%
Credit History 6 10%
Credit History;Amount of loan 4 7%
Education 3 5%
Education;all of the above 1 2%
Education;Credit History;Amount of loan 2 3%
Income 4 7%
Income;Amount of loan 1 2%
Income;Credit History 6 10%
Income;Credit History;Amount of loan 7 12%
Income;Credit History;Amount of loan;Political condition 1 2%
Income;Credit History;Caste factor 1 2%
Income;Education 1 2%
Income;Education;Credit History 1 2%
Income;Education;Credit History;Amount of loan 1 2%
Income;Education;Lack of focus on recovery system 1 2%
Political Risk and Natural calamity 1 2%
(blank)  
Grand Total 60 100%

Count of Do you think better internal control

Percentag
Row Labels system helps in reducing the risk faced by the
e
organization
Maybe 2 3%
No 1 2%
Yes 57 95%
(blank)  
Grand Total 60 100%

Count of If risks are controlled then the Percentag

Row Labels companys performance increases e
may be 3 5%
yes 57 95%
(blank)  
Grand Total 60 100%

Count of If risks are controlled then the company Percentag

Row Labels grows smoothly in terms of profit. e
no 2 3%
yes 58 97%
(blank)  
Grand Total 60 100%

Risks that can be managed very well with the help of internal control system
Financial Percentag
risk Frequency e
1 42 49%
2 24 28%
3 15 17%
5 5 6%
Grand Total 86 100%

Strategic
risk Frequency Percentage
1 30 30%
2 46 46%
3 15 15%
4 4 4%
5 5 5%
Grand Total 100 100%
Operational
risk Frequency Percentage
1 35 36%
2 34 35%
3 15 16%
4 12 13%
Grand Total 96 100%