Asset and Liability Management

Enhancing Asset and Liability Management

Overview

A micro financial institution had been facing inflationary pressures due to the region’s severe economic crisis . The economic volatility in the country affected the institution causing a maturity mismatch in their asset and liability management.

Solution

Aspect Advisory assessed the risks faced by the institution and the effectiveness of their existing controls on a strategic level. A review of the MFI’s ALM policies was conducted as well as a gap analysis to compare the institution’s practices with that of industry best practice.

Aspect Advisory also translated the enhancement on the strategic level into the operational level through recommendations on ALM systems. This involved the provision of practical strategies to manage ALM risks. Additionally, Aspect Advisory coached relevant staff on the implementation of the policies.

Result

The project’s findings ensures the MFI developed a proactive and comprehensive asset liability management framework that aligns business strategies with risk profiles and enhances the MFI’s overall financial resilience.

Business Area

Asset- Liability Management, Treasury, Risk Management

Insights

It’s important for financial institutions to implement robust monitoring systems and early warning indicators to detect emerging risks and take timely corrective actions when they operate in severe economic climates.