Enhancement of FX risk and liquidity management at a partner MFI
TARGET GROUP: Risk management and other staff of KredAqro microfinance institution
OBJECTIVE: Strengthen the risk management practices of the institution and prepare it for a potential EFSE investment.
ACTIVITIES AND RESULTS: The project focused on foreign exchange (FX) risk and liquidity management along with managing FX-induced credit risks through appropriate assessment of clients for FX loans.
The project started with a comprehensive five-day workshop for 9 senior staff that focused on FX rate risk and currency-induced credit risk, ALM and portfolio credit risk. The consultant subsequently interviewed relevant stakeholders and identified gaps in the current risk and liquidity management policies and practices and tools, and recommended improvements to KredAqro.
The second phase consisted of implementing the recommendations, conducting follow-on training, and providing advice on designing an institution specific credit risk sensitivity score, develop an integrated budgeting and ALM forecasting tool.
START: May 2015
END: February 2016
Project partner: Kred Agro, Azerbaijan