Risk Management Excellence

in MicrofinanceConnecting Luxembourg to Leading MFIs

InvitationNovember 26-30, 2010

About this Event

Luxembourg decided to organize the third edition of the workshop dedicated to Risk Management in leading Microfinance Institutions. This event has been specially designed for high level executives of leading MFIs, which have already created or are about to create their own Risk Management Department.

Not only having an opportunity to meet banking professionals from various risk management areas, the participants will also meet MFI representatives who participated in the 2009 edition and who have been selected for a specific technical assistance in the risk management area.

This technical assistance is currently provided through a coaching methodology. The 2010 edition of the workshop will be used as an appropriate period to make the final assessment of this Luxembourgish contribution and will also facilitate exchange of information and experience between players at different stages of the risk management process.

European Microfinance Week (November 30th – December 1st 2010)European Microfinance Week is the annual event of the European Microfinance Platform and draws together its diverse membership to debate, exchange and share experiences on issues impacting microfinance in deve loping countries. European Microfinance Week is the unique meeting point for European providers to analyze the evolution of microfinance in developing countries and bring ‘European answers’ to the threat posed by poverty in these countries.

European Microfinance PlatformThe European Microfinance Platform (e-MFP) was founded formally in 2006 and it has a total membership of over 120 European organisations and indivi duals with microfinance activities in the

developing world (including banks and financial institutions, government agencies, NGOs, consulting firms, resear chers and universities). The main objective of the European Microfinance Platform is to facilitate information exchange and to promote cooperation among diverse European actors involved in microfinance in developing countries.

e-MFP’s vision is to become the microfinance focal point in Europe linking with the South through its members.For more information visit our website www.e-mfp.eu

Luxembourg and Microfinance

The Grand-Duchy of Luxembourg was one of the first EU countries to recognize the value of Microfinance as a tool to fight poverty. Microfinance tools are being systematically used in Luxembourg’s Development Cooperation as effec tive strategies to accompany traditional development activities.

Luxembourg’s official stance on microfinance and inclusive financial sectors has been shaped to a large extent by the extensive experience of specialized NGOs, by the quality work of CGAP and from a variety of multilateral partners. Luxembourg takes some pride in spearheading more than one « avant-garde » initiative in this field:

» One of the first successful microfinance investement funds was registered in Luxembourg. Today more than half of all worldwide Microfinance Investment Vehicles (MIVs) are located in Luxembourg.

» The first investment fund labelling agency (LuxFlag) was launched in Luxembourg. » Luxembourg hosts the Secretariat of e-MFP, the European Microfinance Platform. » Luxembourg not only hosts the European Microfinance Week on an annual basis but is also where the

European Microfinance Prize was twice awarded.

For your information, the European Microfinance Week 2010 - the European Microfinance Platform’s annual event - will take place in Luxembourg from November 30th to December 1st, 2010. Information and Application on www.e-mfp.eu.

Great opportunity: This year, a large part of the workshop last day will take place at the European Microfinance Week.

Risk Management in Microfinance

Risk cannot for sure be simply and purely eliminated: risk is inherent in financial business, whatever the business size. But even so risk management is not a static game, and the recent financial turmoil is there to confirm it. Taking into account these facts, the previous editions of the workshop have shown that it is possible for deve-loping and developed countries to share experience in risk management, provided that the knowledge transfer is organized in a methodological way.

Traditional risk management in microfinance remains generally operated on a “silo” basis, with a lack of transversal vision and weak consideration about risk aggregation or reinforcement. On the opposite, an integrated approach can increase the risk reduction efficiency, taking into account the strong interaction between mana-gement areas, avoiding contra-productive decisions. Building on lessons learned from previous editions, it is clear now that integrated risk management methodologies are good topics to share between mainstream banking and microfinance. For both environments, principles remain principles, but the way to implement them could vary. And this variation is clearly and only depending of right management decisions, and in this management area, definitively, no-decision is not an option.

Comments From Former Participants

Comments of previous workshops’ participants confirm that it is possible to create the expected gateway and the high quality of exchanges during the sessions demonstrated that lecturers were facing real “sparring partners”.

“This seminar has re-shaped my way of organising a lot of activities in my daily work. It has given me more gui dance knowledge to my junior staff member (Head of Departments) on how they can manage their department on daily basis by taking into consideration an issue of risk.” Danny Mpogole, General Manager, Mufindi Community Bank Ltd, Tanzania

“If there will be possibility to conduct the next seminar covering the same issues, I will be glad to send my other colleagues to attend it.” Malkhaz Dzadzua, Chief Executive Officer, MFO Crystal JSC, Georgia

“I am now in a position to set up a risk department in my organisation. I also met other professionals during the seminar whom I am now consulting with.” Rose Muyanga, Chief Internal Auditor, KWFT, Kenya

“The seminar is very helpful for me to build procedural manuals, tools and reporting which are the main parts of the enterprise risk management framework. It brings solution for any daily work in risk management.” Soeung Phyry, Risk Manager, AMK, Cambodia

“From the day 1st to 4th, subject order was placed very logically and understandably. Mix of different methods kept us concentrated on topics the whole time. All lectures gave us a lot. We had a fortune to learn form the experts at these fields.” Albina Iljazovic, Assistant Director, Support Department, Partner Microcredit Foundation, Bosnia & Herzegovina

“As a CEO of a fast growing MFI, it was very useful. Convinced of setting up a RM Unit as soon as possible we will certainly need more advice+coaching on how to best do it.” Essma Ben Hamida, Co-founder and Manager, enda inter-arabe, Tunisia

ADAADA (Appui au développement autonome), a not-for-profit organization, has for over 15 years been a leading player in the field of microfinance in Luxembourg and abroad. A partner

of choice for the assistance of the autonomous development of populations excluded from traditional financial services.

As a pioneer and expert in microfinance, ADA initiates and develops new financial products, helps research, and builds partnerships to best assist microfinance institutions (MFIs) in their process of professionalisation. There are 10,000 MFI, operating throughout the world, serving more than 130 million people whose needs the formal banking sector leaves unmet.

ADA’s capacity building services benefit close to 400 microfinance institutions, located in developing countries where the demands are huge and an estimated 1 billion people still today do not have access to “basic” financial services such as bank accounts, saving products, credits, insurances, money transfers, etc.

ADA, as initiator of innovative concepts, identifies tests and develops microfinance products likely to expand the range of inclusive financial services to low-income populations.

As a partner of choice for knowledge transfer, ADA shares its expertise with other European microfinance actors via the information and documentation center and the House of Microfinance. By organising events and staging awareness campaigns it promotes socially responsible finance for all.

ADA’s initiatives aim to foster transparency and coherency in the microfinance sector, and they converge on a single common target: to boost the fight against poverty.

For more information please visit www.microfinance.lu

The Financial Technology Transfer Agency (ATTF)ATTF is a company created in 1999 by the State of the Grand-Duchy of Luxembourg and other institutions related to the Luxembourg financial sector in order:

» To meet requests for training and consulting in financial matters emanating from countries that have a proven need for the acquisition of financial knowledge

» By providing technical assistance in financial matters and promoting Luxembourg as a Financial Centre to partner countries

» By making the best use of the availability of Luxembourg public funding.

ATTF is a founding member of LuxFlag and a member of the European Micro finance Platform (e-MFP).

For more information please visit www.attf.lu

The Organisers

Association for Risk Management Professionals (PRiM)PRiM is the Luxembourg association for Risk Management Professionals which was founded on July 1st 1997. Members come not only directly from the risk management functions in the sectors of banking, insurance, audit and consulting, but also from a broad

range of related functions such as compliance, internal audit or operational and general management. The principal aims of this non-profit-making association are:

» To provide a Luxembourg-based forum for networking and exchange of information between professionals of the risk management world

» To explore opportunities for cooperation with other Luxembourg professional associations through conferences, joint working groups and other activities

» To contribute actively to the institutional and regulatory world in the Luxembourg financial sector though membership of commissions, working groups and other similar initiatives

» While retaining its original principal focus on the financial sector, to share experience and lessons with risk professionals from other industries

» To provide - in co-operation with the IFBL - risk management training in support of the industry-recognised GARP (Global Association of Risk Professionals) Financial Risk Management Program (FRM) and to seek to broaden this educational stream of activity in line with needs of risk professionals in Luxembourg

» To provide opportunities to learn of a broad aspect of risk issues through the organisation of conferences. » To publish a quarterly newsletter on risk management issues.

For more information please visit www.prim.lu

The Organisers

Thursday, November 25th 2010

18:30 – 19:30 Evening welcome drink at Mercure Grand Hotel Alfa

Friday, November 26th, 2010

09:00 - 09:30 Welcome address and Practical information session

09:30 - 10:30 Lessons learned from previous experience The experience of the two first workshops organized in 2008 and 2009 have been successful and it is a good opportunity to share with 2010 participants the different stages of the process: the workshop, the coaching on site, the remote follow-up and the closing meeting.by Mr Yves Mathieu, External project manager, Coach in the project, Official ATTF Senior Expert

10:30 - 10:50 Coffee Break

10:50 - 12:20 Risk management positioning Mainstream banking supervision is now risk based deployed, according to Basel II regulation. How is it possible to take the “cream” of this framework to create a real risk awareness in microfinance and how to deal with challenges this approach could generate? Risk based supervision approach is surely a good trigger to think about global or integrated risk management.by Mr Yves Mathieu

12:20 - 13:40 Lunch

13:40 - 15:10 Corporate governanceThe link between corporate governance and risk management is now obvious. The “story” starts at the highest levels of an organization. What are the rights and duties of key players?by Mr Samuel Grand, Chief Risk Officer, ABN-AMRO Bank, Luxembourg, PRiM Member, Coach in the project, ATTF Trainer

15:10 - 15:30 Coffee Break

15:30 - 17:00 Creation of a risk management function Key success factors to succeed in an efficient risk management function are not numerous. The set-up of right information streams are on the top of the agenda. Which components of the risk management framework are essential to increase the probability to be successful?by Mr Samuel Grand

17:30 - 18:30 Presentation of the House of Microfinance

Programme

Programme

Saturday, November 27th, 2010

09:00 - 10:30 Risk assessment and identification Risk identification is the corner stone of the risk management process. The determination of benchmarks to verify the efficiency of risk strategies and tactics is a must to create the process foundation.by Mr Paulo Marques, Head of Risk Management Department, BCP Bank Luxembourg, Coach in the project, ATTF Trainer

10:30 - 10:50 Coffee Break

10:50 - 12:20 Risk cartography As a powerful tool to prioritize risks, risk cartography has to be managed in the right order. Severity and frequency are the key words of this approach, with quantitative and qualitative criteria.by Mr Paulo Marques

12:20 - 13:40 Lunch

13:40 - 15:10 Risk management strategiesFour major strategies are available to manage risks. How to avoid, transfer, accept and control risks and what are the major consequences of these different main lines?by Mr Thierry López, Director, PriceWaterhouseCoopers, Luxembourg, PRiM Member, Official ATTF Senior Expert

15:10 - 15:30 Coffee Break

15:30 - 17:00 Risk management strategies (Continued)

Sunday, November 28th 2010

Visit of Luxembourg City and the countryside (depending on the number of people interested).

Monday, November 29th, 2010

09:00 - 10:30 Case Study Part 1 Identifying and Prioritizing Risks in MFIs: Examples from Finance and Credit Operationsby Ms Karla Brom, Independent Microfinance Risk Consultant, USA

10:30 - 10:50 Coffee Break

10:50 - 12:20 Case Study Part 1 (Continued)

12:20 - 13:40 Lunch

13:40 - 15:10 Risk management tactics More and more, tools at the disposal of microfinance are available to mitigate risks. The cases of liquidity, funding risk and currency risk are examples to show that mainstream banking derivatives are not the unique tools to be used for this purpose.by Mr Guy Mertens, Head of the ALM Unit in the Risk Management Department, European Investment Bank, Luxembourg, PRiM Member, Official ATTF Senior Expert

15:10 - 15:30 Coffee Break

15:30 - 17:00 Risk management tactics (Continued)

Tuesday, November 30th, 2010

08:00 - 09:30 Risk Case Study Part 2 Liquidity and funding risk issuesby Ms. Karla Brom

09:30 - 09:40 Coffee Break

09:40 - 10:30 Case Study Part 2 (Continued)

10:30 Transfer to the Neumunster Abbey – European Microfinance Week

11:00 - 12:30 Lessons learned from the implementation of the Risk Management Facility (RMF)RMF is a donor funded initiative aimed at adapting and transferring advanced risk management techniques to small and medium size microfinance intermediaries (MFIs) in Latin America. The impact on MFIs of appropriate Risk Management tools will be addresses as well as discussion of key issues uncovered during imple mentation and possible extension of the initiative to other regions.by Mr Alex Silva, Managing Partner of Omtrix/Risk Management Facility-RMF, Costa Rica

12:30 - 14:00 Lunch

14:00 - 15:30 Risk management gateway livePresentation of the coaching experience by the coaches-coachees duos. Open session where participants, lecturers, coaches and other interested people can exchange views about the ATTF/ADA/PRiM initiative and the creation of the “risk management gateway” between leading MFIs and Luxembourg

15:30 - 16:00 Coffee break

16:00 - 17:15 Presentation of the finalists of the 3rd European Microfinance Award

17:15 Transfer to the European Investment Bank

18:00 3rd European Microfinance Award CeremonyThe ceremony will be chaired by Her Royal Highness the Grand Duchess of Luxembourg

19:00 Reception

Programme

Experts Biographies Extracts

Karla Brom is an international banking and finance expert with over 20 years of experience and a specia-lization in risk management and corporate governance. She has been advising and training on the topic of microfinance and risk management since 2001, working with Citigroup’s business initiatives in microfinance, CGAP, the EBRD, EFSE, the IFC, the Grameen Foundation, Women’s World Banking, Mercy Corps, and EFSE. She was formerly a Senior VP at Citigroup, where she has seven years of experience as a risk manager, inclu-ding oversight of Citi treasuries in Central and Latin America. Karla Brom is an independent consultant and has delivered trainings on financial risk management to over 125 MFIs around the world, including at the Boulder Microfinance training program in Turin. Most recently she has worked with the Grameen Foundation’s Micro-savings Initiative, looking at two large MFIs in the Philippines and Ethiopia. Karla Brom has a BA from Wellesley College and an MA from the Fletcher School of Law and Diplomacy.

Samuel Grand, after having started his career at Arthur Andersen (external audit and consulting) in France and then in Switzerland, took the responsibility of the Internal Audit function at Fidelity Investments in Luxembourg, covering the Continental European region. Initially graduated from a Master at ICN Business School (France) and in Business English from the Franco-British Chamber of Commerce and Industry, he strengthened his internal audit skills in 2003 through becoming a Certified Internal Auditor (CIA). He then joined ABN AMRO Bank in Luxembourg in 2005 to set up and develop the operational risk management and investment com-pliance function, together with the compliance to the Sarbanes-Oxley Act. He became Country Risk Officer in 2007, heading the overall risk management function (credit risk & administration, operational risk & internal control, investment risk) and had regional exposure in 2009 (Jersey, Belgium, Luxembourg). Since 2009, he has been involved in the microfinance programs initiated by ADA, PRiM, ATTF and the Luxembourg Ministry of Finance and conducted coaching assignments in risk management fields in Morocco and Mongolia.

Thierry López has an experience of more than 17 years in the industry. He is the Basel II Leader, the Risk Management Services Leader and the GRC (Governance, Risk and Compliance) Leader at Pricewaterhouse-Coopers Luxembourg. Thierry is founding member, honorary chairman and member of the board of PRiM, the Association of Risk Management Professionals in Luxembourg, and member of consultative committees for various associations and regulators. He is involved in the academic circle and research as Risk Management Professor at the HEC-Business School of the University of Liège. He wrote articles and well-known books in English with John Wiley & Sons and in French with De Boeck Université.

Paulo Marques is the chief risk officer at Banque BCP in Luxembourg. He was formerly an internal auditor, a compliance officer and a project manager. In the past years, Paulo has trained and advised several finan-cial institutions in asset-liability’s and risk management. He is a lecturer on financial and bank management topics within the bank sector. He has written articles in risk management and a thesis “Measuring and modeling operational risk in the Basel II framework”.

Yves Mathieu started his financial career some 28 years ago as branch manager for a large Belgian bank. Until the late nineties, he has evolved from commercial responsibilities to more financial and managerial ones. He left the banking sector in 2001 to move to IT consulting business but came back in 2002 to become Member of the Management Committee of the banking subsidiary of the second largest Belgian insurance company. He remained at this position until February 2005. Since the mid-nineties, he has regularly taken part, as an independent consultant, in missions organized by consulting or training organizations. He decided in March 2005 to act full time in this business for the Finance and Microfinance sector. His involvement in the later one has been stronger and stronger since his first mission in this area in 1998. Since November 2009, he has been a board member at Reseau Financement Alternatif, Belgium.

Guy Mertens currently holds the position as head of ALM unit, in European Investment Bank’s Risk Mana-gement Department. His current responsibilities include balance sheet and earnings simulations, the measurement and the projection of the bank’s transformation result, the development and implementation of new methods to measure and simulate the economic contributions of the bank’s various activities. Prior to joining EIB, Guy worked at a subsidiary of the French banking group Credit Mutuel in Luxembourg as a Money Market and FX trader, until he moved to the risk management department to implement a risk management system for the Treasury Department. He holds a Master’s degree in Econometrics delivered from the University Louis Pasteur in Strasbourg and a Certificate in Finance from New York University.

Alex Silva, over 25 years’ experience in international finance, with particular expertise in the areas of fund administration and financial engineering as well as evaluation, strategic planning and corporate governance of microfinance intermediaries. CEO of Omtix, Inc. a fund management and financial consulting company based in Costa Rica (www.omtrixinc.com) and that currently manages the Emergency Liquidity Facility (ELF), the Calmeadow Foundation (of which Alex Silva is the Executive Director), Antares Fund, the Short Term Liquidity Facility (STLF) as well as the Risk Management Facility. Also, Chair of the board of MFX Solutions (a specia-lized vehicle created to help MFIs mitigate FX Risk), Board member of AfriCap, a fund specialized in investing in micro financial intermediaries in Sub-Saharan Africa) and the advisory Board of Microrate (a specialized rating agency for microfinance). Former CEO of ProFund (the first fund specialized in investing in the equity of MFIs) and as such participated in several Board of Directors of MFIs in Peru, Bolivia, Paraguay, Ecuador, Nicaragua, Colombia, Venezuela, Mexico and Haiti. Also, former member of the Advisory Council of the Consultative Group to Assist the Poor (CGAP). Lectured on microfinance investment and governance of microcredit insti-tutions at Boulder’s Economics Institute and Brandeis University.

Experts Biographies Extracts

Practical Details

Financial ConditionsThe Luxembourg Ministry of Finance will pay for management fees, accommodation (nights and breakfasts from November 25 to December 1st, 2010), lunches on seminar days, transportation (private or public bus within the framework of the programme), shuttles from/to the airport, city and countryside visits.

The participant will pay a contribution fee of 1000 € VAT incl., the flight tickets, pocket money, phone bills, mini-bar, dinners...

AccommodationMercure Grand Hotel Alfa (in front of the railway station)16, Place de la gareL-1616 Luxembourg Centerhttp://www.accorhotels.com/accorhotels/fichehotel/gb/mer/2058/fiche_hotel.shtml

Each room is air-conditioned and equipped with bathtub/shower, mini-bar, telephone, television, free wireless internet access.

Accommodation (room charge from November 25 to December 1st, including breakfast) is covered by the Luxembourg Ministry of Finance. The participant will pay the phone bills, mini-bar and any other additional services.

Seminar VenueChamber of Commerce7, rue Alcide de GasperiLuxembourg-Kircherg

The Conference Center is located in the center of the Kirchberg District, business area of Luxembourg City (3km from the hotel). Transfers between the hotel and the conference center will be organized by public bus.

On Tuesday November 30, the seminar will take place in Mercure Grand Hotel Alfa, and then in the Neumunster Abbey.

LanguageThe workshop will be held in English. A translation into French/Spanish might be organized if sufficient requests are received.

ApplicationAs the available number of seats is limited (23 seats + 2 from the 2010 coaching representatives), applications will be confirmed after a short selection process (high level executives of the leading MFIs). We will try to set up a homogeneous group with complementary experience for a maximum harmonization of risk management practitioners.

The application deadline is set on September 1st, 2010. Files will be analyzed on a first-come-first-served basis. After the submission of your application, we might also contact you for a short interview. Selected participants (max. 23) will be personally notified of their acceptance before September 15, 2010.

Practical Details

If a visa is needed for your stay in Luxembourg, you have to apply for it at a Luxembourg representation in your country immediately after receiving the notification of acceptance. On request, you will be provided with an official invitation letter to submit with your visa application.

Payment detailsThe full payment of the contribution fee must be sent after the acceptance and received at the latest by November 1st, 2010.

General conditions of cancellation:

1. Possible before November 1st, 2010: 100% reimbursement2. In case of cancellation after November 1st, 2010:

• no refund unless a waitlisted applicant can take up the place• the invoice remains due.

Payments by bank transfer to ATTF account (without any transfer fees for ATTF) at:

Banque et Caisse d’Epargne de l’Etat, LuxembourgIBAN CODE: LU29 0019 0038 5235 9000BIC CODE: BCEELULL

Personal detailsMr / MrsFirst name / Last nameDate of birthNationality

OrganizationDepartment or UnitPosition

Postal AddresseMail

Phone numberFax numberMobile number

Personal background in Risk management

Organization DataMixMarket Ranking (2010)Total Balance Sheet (EUR)# Active customers (Total or if available gender)# Staff

Risk management or ALCO Committee (Y or N)If yes, frequency of meetings

Risk management or ALM Department (Y or N)If yes, # of staff employedIf no, expected on (date)

I need a translation (Y or N) Language

Please, join the last available financial statement of your organization to the application form.

I herewith submit my application for the “Risk Management Excellence in Microfinance Workshop 2010” and confirm that I have read and understood my contractual obligations as stated in the practical details.

Date, Place and Signature

To send to ATTF before September 1st, 2010 byeMail: microfinance@attf.luPostmail: ATTF, BP.13, L-2010 LuxembourgFax: +352 268673699

Application Form

Risk Management Excellence in Microfinance Workshop - November 26-30, 2010 - Luxembourg