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Monitoring & Risk Management Practices in BSFL

Monitoring & Risk Management Practices in BSFL. Presentation by: Balgovind Sahu Manager-MRM. The BASIX Mission….

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Monitoring & Risk Management Practices in BSFL

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  1. Monitoring & Risk Management Practices in BSFL Presentation by: Balgovind Sahu Manager-MRM

  2. The BASIX Mission….. To promote a large number of sustainable livelihoods, including for the rural poor and women, through the provision of financial services and technical assistancein an integrated manner BASIX will strive to yield a competitive rate of return to its investors so as to be able to access mainstream capital andhuman resources on a continuous basis.

  3. TRIAD Strategy IDS (Institutional Development Services) (To become sustainable) Livelihood Triad LFS (Livelihood Financial Service) (To manage income) Ag/BDS (Agriculture & Business Development Services) (To increase income)

  4. The BASIX Livelihood Triad LIVELIHOOD FINANCIAL SERVICES: Credit, Insurance & Savings for lives and livelihoods AGRICULTURAL/BUSINESS DEVELOPMENT SERVICES (AG/BDS) Productivity enhancement, Risk mitigation, Local value addition and alternative market linkages for input supply and output sales INSTITUIONAL DEVELOPMENT SERVICES (IDS) Formation of producers’ groups, federations, cooperatives, Capacity Building, including entrepreneurship development, Human Resource Development and Accounting and management information systems

  5. BSFL- Risk Management Guiding Principal “BSFL Risk Management function is guided by the Enterprise Risk Management developed in the COSO Enterprise Risk Management – Integrated Framework”

  6. Operational risk” is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. Risk Aspect Mitigation Strategies Geographical & Scattered Portfolio Feasibility Study/ Village Survey Concentration Risk Diversifying portfolio, Product wise, Caste wise, Gender wise & Geographical. Poor handling of Cash at Field Avoid keeping the cash more than 24 Hrs at field and No cash day system Uniformity in communication at all the level and visual communications Unfulfilled promise & poor Communication Data Security & Management / Failure of information technologies Daily data back-up at all branch and disaster data security management Back

  7. “Credit risk”is the risk to earnings or capital due to borrowers’ late and non-payment of loan obligations. Risk Aspect Mitigation Strategies

  8. “Service risk” is the risk of inadequate service delivery to customers/clients as promise at the time of enrolment. Risk Aspect Mitigation Strategies Lack of knowledge of service delivery mechanism. 3 month induction & orientation on Product, service, policy & procedure. Recruitment of technical qualified person Building the technical ability by class room & field training Lack of technical skills Handling of portfolio after completion of orientation & training Improper induction to LSA/P about Services Poor delivery of Service FTNS concept, Service delivery monitoring by FX, UH & MRM team. Lack of improvement in service delivery mechanism / Monitoring of service risk converted into credit/ operation risk Poor monitoring of service delivered Back

  9. “Fraud risk” is the risk of loss of earnings or capital as a result of intentional deception by an employee or client. Risk Aspect Mitigation Strategies Loan origination & appraisal by the different person/ JLG Ghost or Benami loan Processing of fake claims and unauthorized expenses. High degree of Organisation value & ethics. Claiming of expenses on the self judgment. Tempering of financial data or report System will not permit alternation, Cross check system at HO & Unit Pre disbursement visit, Appraisal technique & disbursement check Bribe/Kickback/Collusion Collection of money without issuing of receipt/Prepayment rotation Customer awareness and mechanism to identify within 24 Hrs. Dummy robbery Investigation by the Risk team Back

  10. “External risk”refers to the inherent risks of the company business activity and the external business environment. Risk Aspect Mitigation strategies Village level influence persons (Political Risk) Avoid meeting at local influence person ‘s house, using public place for meeting & other livelihood service deliver. Middlemen interference Effective communication to customer about the direct approach & deliver channel. Robbery/ Theft Risk assessment of routes & area before starting any village and categories as Low/Moderate/High Competitions Focus on customers satisfactions Customer satisfaction survey and dropout study Back

  11. Internal Control System in BSFL BSFL managing the risk through effective internal control system BSFL internal control system provides the 95% prevention, 3% detection & 2% correction.

  12. Contact:balgovind.s@basixindia.com 09393909064

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