On the 16th January 2020, AFC in partnership with the Lao Microfinance Association (MFA) and the Bank of Lao PDR (BoL) conducted a joint workshop on “Development of Risk Management Policy for Deposit-taking Microfinance Institutions (DTMFIs) in Lao PDR”.
The main objectives of the workshop were to discuss and share the experience of Patoukham DTMFI, a first LAFF (Lao Access to Finance Fund) Project’s Partner MFI in development of risk management policy and to share lessons learnt among the other DTMFIs in Lao PDR as the entire microfinance sector is in need of good risk management practices.
The workshop was chaired by Mr. Nouxay PHOUMSOUVANH, Deputy Director General of Banking Operations Department of BoL, and co-chaired by AFC’s Lao Access to Finance Fund (LAFF) Team Leader. 35 participants took part in the workshop, including the LAFF project stakeholders (Bank of Laos, AFC, MFA, and Patoukham DTMFI) and the target audience (17 DTMFIs) comprising of members of the board of directors and top management.
During the workshop, the participants were actively discussing the following issues related to the risk management for DTMFIs:
- The role and importance of Risk Management for DTMFI and the critical leadership of board directors;
- The impact on awareness around risks and risk management following the technical assistance provided by AFC/LAFF to Patoukham DTMFI;
- The risk-management and supervision, and risk-management training, including open discussion in order to understand the importance of Risk Management from a Supervisor’s perspective and to learn of the role of FISD in risk management and their expectations of DTMFIs;
- The risk-management policy development and demand for related training, including open discussion in order to raise understanding and appreciation on the importance of Risk Management for DTMFIs and then leading to implementation of a comprehensive risk management practice in the day to day operations of DTMFI.
By the end of the workshop, the DTMFIs participants confirmed that they were ready to go back to their DTMFI and flag the importance of risk management to their DTMFI’s Board of Directors and then take it further for a joint discussion as a whole sector agenda.