Group 3:Risk Management

1
Group 3Risk Management MIS

• Chair
• Mr. Safar Ali Lakhani
• President Soneri Bank Limited

2
Recommendation 1

• Set up SME as dedicated BU within Bank
• Industry sector know-how
• Subsegmentation coverage model
• Know-your-customer (relationship based model)
• Mindset shift in Risk Management (portfolio based
  management with predefined triggers)

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Recommendation 2

• Start with limited exposures
• Set up limit for starters at maximum consumer
  finance (e.g. PKR 500K)
• Encourage job creation

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Recommendation 3

• Keep it simple and short
• New customers have limited data
• Customer self assessment to be used (sales
  figure)
• Develop matrix of Years in Business and Years
  with Bank and provide financing as of sales

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Recommendation 4

• Verification of loan utilisation
• direct payment from Bank to Vendor for larger
  amounts, if possible

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Recommendation 5

• Invest in IT to track and monitor large number of
  accounts and its performance

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Recommendation 6

• Risk Mitigation
• Expand eligible collateral
• Cash-flow analysis
• Credit insurance
• Personal and/or 3rd party guarantees
• Risk based pricing

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Recommendation 7

• Develop MIS (centralised)
• Actuals
• Trends
• Stress Testing
• Risk Triggers (predefined)
• Collections incl. Time buckets and action plans

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Recommendation 8

• Strengthening of Credit Bureaus
• Positive data
• Credit history
• Expanding role of private Credit Bureau (incl.
  Rating agencies)