IFC’s Risk Management Program: The Rewards of Navigating Risk
The global financial crisis severely shook economies around the world, underscoring the need for governments and businesses – especially financial institutions – to strengthen their risk management and governance practices.
Although taking risk is an inherent part of doing business, many risks can be identified and avoided. With the right policies and practices in place, businesses large and small can insulate themselves from even the worst financial shocks.
In other words, the iceberg doesn’t have to sink the ship.
IFC launched its Global Risk Management Advisory Program in response to the 2008 financial crisis to address risk management challenges in emerging markets, including in Africa.
The IFC program works to strengthen financial institutions’ risk management capacity and frameworks, loan portfolio monitoring, and nonperforming loan management and workouts capacity, while supporting the development of emerging distressed asset markets.
IFC’s goal is to help financial institutions develop effective risk management systems that will highlight and minimize potential problems, in turn allowing them to attract capital, protect against losses, benefit customers, and instill confidence in regulators, investors, and rating agencies.
Martin Kimmig, IFC's Chief Risk Officer in Sub-Saharan Africa, said, "With the rapidly changing business environment and great opportunities in Africa, prudent risk management is needed to facilitate growth and the exploration of new business opportunities. As part of our support for private sector development on the continent, IFC is committed to help the region’s financial institutions prepare for the upcoming challenges in risk management."
Awareness Events, Best Practices
Increased investor interest in Africa means its banks are becoming more closely entwined with – and dependent upon – markets in Asia, Europe, and the Americas. This endorsement is mostly good news, but it also exposes African institutions and economies to dangers far beyond its borders.
And while many African banks have already established policies and committees for tighter risk control, there is much more they can do to avoid domestic and international shocks, and to comply with voluntary regulations, such as those set out in the Basel accords.
To help, IFC regularly conducts awareness-raising events for financial institutions and others.
Since 2009, IFC has held 150 risk management financial sector workshops and conferences in 36 countries, including in Eastern Europe and Central Asia, Sub Saharan Africa, South Asia, East Asia & Pacific, Latin America & the Caribbean, and the Middle East and North Africa.
The forum, presented by IFC with FT Live and This is Africa, will feature high-level panel discussions and presentations from leading voices in the risk management arena, including regulators, academics, and banking chief executives and board members.
Discussions will focus on timely topics, including regulatory challenges, risk governance, the liquidity conundrum, market trends in Africa, risk in fragile countries, and the ongoing lessons from the 2008 financial crisis. The event is aimed at senior executives and others with a keen interest in gaining valuable insight into risk management and Africa’s growing role on the global financial stage.
The Africa Risk Management Banking Forum is generously supported by UKAID, Japan, IFC’s Access to Finance Business Line, and IFC’s Conflict Affected States in Africa Initiative (CASA) and its donor partners Ireland, the Netherlands, and Norway.
For more information contact:
Africa Risk Management
IFC and the Financial Times are hosting the Africa Risk Management Banking Forum in Cape Town, March 19-20. The two-day event will feature high-level speakers and panel discussions on a range of risk management topics important to all financial institutions in Africa. Click here for more information.