Qualitative Risk Assessment Crucial in Credit Assessment – Dr. Mhlanga

OPENING SPEECH AT WORKSHOP ON INVESTMENT APPRAISAL AND RISK ANALYSIS HELD AT EZULWINI SWAZILAND, 3RD DECEMBER 2012, BY DR VINCENT MHLANGA, CHIEF EXECUTIVE OFFICER OF SWAZILAND INDUSTRIAL DEVELOPMENT COMPANY LIMITED (SIDC)

 

Qualitative Risk Assessment Crucial in Credit Assessment – Dr. Mhlanga

 

Good morning! Mhlanga

 

Allow me please to welcome you to Ezulwini, Swaziland. I trust you are going to have a wonderful and memorable stay in the Kingdom. I am grateful indeed that you were able to come. 

It therefore gives me great pleasure to have been invited to the opening of this important workshop, that is so relevant to our times.

 

Post the 2008 credit crunch that beset world economies in every region, it is therefore only prudent that a workshop of this nature should take place. No doubt, this bitter experience has necessitated changes or a rethink in the manner in which investment and credit are handled by companies, in particular financial institutions.

 

 he risks that institutions face come from both the demand and supply side the equation.  Exporters do not know whether or not the importing companies are financially healthy enough to continue honouring their invoices.  The reverse is also true, as importers are not sure whether or not their important supplies will be available at all times. It is therefore very important that companies should try to mitigate these risks to acceptable to another levels. What is acceptable for one company is not necessarily acceptable to another company. This depends on the risk appetite of the individual companies.

 

The naked truth is that, it is impossible to run business without any form of risk. It is therefore imperative that one is able to identify the inherent risks that come with every project or opportunity, and then set out strategies to mitigate such risks so that they are within the company’s acceptable risk parameters.

 

It is appreciated that there are a number of methods to identify risk quantitatively. I trust you will learn a