Fraud has increased in microfinance institutions due to weak monitoring and internal control, according to a senior microfinance expert.
Fraud has increased in microfinance institutions due to weak monitoring and internal control, said chair of the CSD Shankar Man Shrestha during the inaugural session of ‘Symposium on Fraud Control and Management’ organised by Centre for Self-help Development (CSD) here today.
“Fraud was unheard in microfinance till a couple of years back but risen to epidemic level in recent years,” he said, adding that the MFIs leader should be vigilant and make regular interaction with the client and field staff.
CSD – one of the pioneer institutions to launch microfinance in Nepal – organised the symposium, which saw various speakers in the panel session. In the panel discussions, experienced and senior chief executives of microfinance institutions focused on the steps to tackle fraud in microfinance. The panelist outlined that monitoring and supervision is a key towards eradicating fraud. The CEO’s should have both KYC of clients and staff. They further said that CEO’s should be aware of the lifestyle of their staff to prevent the fraud in microfinance.
An expert Shyam Khatri presented on legal remedies to tackle the problems endemic in microfinance sector. He mentioned that the bank and financial institutions can themselves formulate bylaws in conjunction with relevant acts of the government to tackle banking fraud in their particular organisation and such bylaws will have legal repercussions.
Discussion was also carried out on concept of internal control and good practices seen in different organisations. Traits and qualities of good management styles were also shared among the participants. There was consensus among the staff that the MFI’s should enact preventive measures such as right and well-motivated human resources and devising strong audit control practice in the organisation.
Fraud has increased in microfinance institutions due to weak monitoring and internal control, said chair of the CSD Shankar Man Shrestha during the inaugural session of ‘Symposium on Fraud Control and Management’ organised by Centre for Self-help Development (CSD) here today.
“Fraud was unheard in microfinance till a couple of years back but risen to epidemic level in recent years,” he said, adding that the MFIs leader should be vigilant and make regular interaction with the client and field staff.
CSD – one of the pioneer institutions to launch microfinance in Nepal – organised the symposium, which saw various speakers in the panel session. In the panel discussions, experienced and senior chief executives of microfinance institutions focused on the steps to tackle fraud in microfinance. The panelist outlined that monitoring and supervision is a key towards eradicating fraud. The CEO’s should have both KYC of clients and staff. They further said that CEO’s should be aware of the lifestyle of their staff to prevent the fraud in microfinance.
An expert Shyam Khatri presented on legal remedies to tackle the problems endemic in microfinance sector. He mentioned that the bank and financial institutions can themselves formulate bylaws in conjunction with relevant acts of the government to tackle banking fraud in their particular organisation and such bylaws will have legal repercussions.
Discussion was also carried out on concept of internal control and good practices seen in different organisations. Traits and qualities of good management styles were also shared among the participants. There was consensus among the staff that the MFI’s should enact preventive measures such as right and well-motivated human resources and devising strong audit control practice in the organisation.
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