Risk Management

 

At dunia, we believe that a unique and robust risk management architecture is a critical factor for any organization's success. This ensures predictability despite scale. Hence, risk management is an integral part of our business strategy, striking a balance between risk control and growth.

We have a well-defined and tiered risk control framework that ensures an in-depth and independent process of policy setting, policy implementation, control, tracking, issue identification, severity analysis, and feedback process. Risks such as credit risk, operational risk, market risk, reputational risk, business practice, etc. are reviewed at both the management and board committee level. These reviews are further enhanced through internal audits.

Risk Philosophy

  • Preserve the capital of the company  by building controls to limit damage on account of event shocks
  • Ensure that the company is liquid at all times
  • Enable profitable growth through risk reward leverage 
  • Reduce volatility of earnings by embedding sound controls over risk exposure cycle 
  • Ensure predictability of earnings through robust analytics and constant testing to understand the impact of various actions on portfolio performance
  • Ensure sustainability of earnings by discouraging "short-term" behavior

Key Aspects of Risk Management

Led by a Chief Risk Officer who reports directly to the CEO, the risk management organization is responsible for management and monitoring of credit, liquidity, market and operational risks across dunia. It is independent of the revenue generating function.

Documented Risk Management Framework

A framework catering for granularity on management for various risks and a well articulated delegated authority framework enables a principles-based approach to management of risks with clarity on roles and responsibilities and assurance mechanisms for various stakeholders.

Risk Appetite

Risk appetite is clearly articulated through hurdle rates which are translated into delinquency and loss benchmarks, against which the regular monitoring is done through a “Windows on Risk”.

Strong Analytics Orientation

A robust datawarehouse capturing demographic, behavioural and performance data along with tools and techniques enabling drill down analysis at all levels that is critical for objective decisioning.

Robust Assurance Mechanism

Providing assurance to various stakeholders that risks are well-managed and in line with agreed risk appetite. This is established through self assurance checks to formalized regular audits that provide assurance to the Board of Directors.

Governance Framework

The Board of Directors is responsible for setting risk appetite. Oversight at the Board level is provided through the Audit Committee and the Risk Committee. At the executive management level there are committees to provide oversight to the various risks (ALCO, Business Risk & Compliance Committee and Credit Committee).

Strong Collection and Rehabilitation Process

A strong collection mechanism ensures that delinquency is managed within desired levels. The collection mechanism also includes a rehabilitation process, which factors in the customer’s willingness and ability to pay.