1. contact@e-mfp.eu www.e-mfp.eu Risk in Microfinance Coaching at the National Microfinance Bank, Jordan Yves Mathieu Consultant

2. contact@e-mfp.eu www.e-mfp.eu Risk Management – Excellence in Microfinance Workshop – Past Story Board 2006 – European Microfinance Week Workshop "Challenges for MFIs in Risk Management" Needs analysis with a limited survey sent to 7 major MFIs Results  Organization and training Implementation  Workshop, with the first edition in 2008, supported by ATTF, ADA and PRiM (the 5 th edition is currently running)  Coaching process with remote assistance, with 6 MFIs selected after the 2008 workshop, with 2 MFIs from Jordan

3. contact@e-mfp.eu www.e-mfp.eu Alwatani - National Microfinance Bank Alwatani NMB was established on 15/7/2004 Social objective Alwatani has a strong official support (Royal family) 30 000 + active borrowers Gender : 92% female customers 16 mlns EUR gross loan portfolio Average loan : 550 EUR

4. contact@e-mfp.eu www.e-mfp.eu Objective of the first mission in 2009 To Set up an effective risk management structure with authority and appropriate notification structure; which includes:  Establishing an independent risk management function reporting directly to senior management  Empowering professionals with appropriate skills to perform their required duties  Installing systems capable of measuring, managing and reporting risks in a timely and accurate manner After the visit, NMB started a risk function and established risk team consisted from key risk persons

5. contact@e-mfp.eu www.e-mfp.eu Second visit in 2010 NMB was guided to the best practices in setting and applying the risk policies and spreading the risk culture Visit helped to decide the allocation of Risk dept in the organizational structure and define the communication channels, responsibilities, roles … Formulating the risk committee Segregation between risk and credit risk functions Guiding to new risk areas such as risks related to staff satisfaction, reputation risks…

6. contact@e-mfp.eu www.e-mfp.eu Lessons learned Generally speaking, confusion of concepts  Risk and audit  Risk and strategy  Risk and governance Weak “real” awareness, just formal statements, about risk management if main consequences are not clearly explained Concrete risk management is a pure management decision, even if the institution is small – Importance of adequate resource allocation Communication is important Keep it simple

7. contact@e-mfp.eu www.e-mfp.eu Thanks for your attention !