Transcript Enterprise Risk Management

Enterprise Risk Management
A SME CENTRIC APPROACH
Ankita Agrawal
[email protected]
+919830192095
RISK
The probability of an outcome which is not desirable
Risk
Implementation Risk
Strategy Risk
Business
Legal Risk
Environmental
Risk
Financial Risk
Operations
Material Risk
Market Risk
Compliance
Risk
Credit Risk
Demand Risk
Forex Risk
Competitor
Risk
Reporting Risk
Technology
Risk
Personnel Risk
Control Risk
I.T Risk
Risk Assessment
Measurement of probable risk
“At Risk” model
Measures both impact
and likelihood of risk
Benchmarking
Assessment of Loss
Events
Back testing
Quantitative
Assessment
Sensitivity Analysis
Probabilistic vs. Nonprobabilistic
Risk Assessment
Qualitative
Assessment
A qualitative assessment
based on non
mathematical
measurement of risk
Measures only impact
of risk
Scenario Analysis
Stress Testing
Risk Appetite
The tolerance and capacity of risk
Risk
Appetite
Risk
Tolerance
Risk
Capacity
Risk appetite of the
entrepreneur
Risk averse
Risk
Neutral
Risk appetite of the
business
Risk prone
High
Medium
Low
Enterprise Risk Management (ERM)
Does not mean
Pile of Documents
Expensive Consultants
Enterprise Risk Management (ERM)
means
Holistic approach to manage risk across organization
Unless requires under a statue or an agreement –
Risk Assessment and Mitigation
May not be documented
May not be formal
May not be communicated to all levels of employees
Enterprise Risk Management requires identifying –
• The Risk Tolerance
• The Risk Capacity
• Steps to bridge the gap between risk tolerance and risk capacity
• Business and Operational Risk
• Options to mitigate identified risk
MSME IN INDIA
MSME
Manufacturing
Enterprise
Service Enterprise
Investment in Plant
and Machinery
Investments in
Equipments
Micro Enterprise
Small Enterprise
Medium Enterprise
Micro Enterprise
Small Enterprise
Medium Enterprise
Investment upto Rs.
25 lacs
Investment between
Rs. 25 lacs and Rs. 5
crores
Investment between
Rs. 5 crores and Rs.
10 crores
Investment between
Rs. 1 lacs and 2
crores
Investment between
Rs. 2 crores and 5
crores
Investment upto Rs.
10 lacs
India has more than 13 million MSME
MSME forms for 45% if
Indian Manufacturing and
40% of Exports from India
Generate 31 million
employment
opportunities
Contribute to 22% of the
GDP
Spread over 20,000
industries