AADFI Secretariat releases directives for the 2nd peer review of DFIs using the AADFI Prudential Standards, Guidelines and Rating System (PSGRS)

In line with the AADFI’s efforts to strengthen African Development Finance Institutions, and entrench good governance in their operations, the Association’s Secretariat in accordance with the resolutions reached during the 1st Peer Review exercise held at the 2009 AADFI CEOs Forum, has announced that the 2nd Peer Review of member – institutions using the AADFI Prudential Standards Guidelines and Rating System (PSGRS) will take place in 2011. The result of the exercise will be evaluated and presented at the 2011 CEOs Forum scheduled for November 2011.
The directives for the Peer Review exercise are as follows:

1) Member – institutions should as a first step objectively conduct an internal assessment of their institution using the PSGRS. It is advised that the last audited account of the institution be used for the assessment.

2) The Result of the self – assessment should be submitted to the External Auditor or Supervisory Department in the Central Bank of the institution concerned or as applicable for validation/ or certification.

3) The validated or certified result should then be submitted to the AADFI Secretariat not later than June 30, 2011.

4) The received results from member – institutions will be compiled and reviewed by the PSGRS Consultant.

5) The final result of the 2nd Peer Review would be announced in November 2011 CEOs Forum.

An Award has also been instituted for the best performing 5 DFIs based on the result of the exercise. It will be recalled that the essence of the PSGRS and the Peer Review exercise were to assist member – institutions in identifying their areas of weaknesses and strengths with a view to applying corrective measures to address identified weaknesses, thereby ensuring that African DFIs operate under international best practices.
The PSGRS mechanism is directed at assessing DFIs in the following three (3) key areas: (i) Governance Standards, (ii) Financial & Prudential Standards, and (iii) Operational Standards.

In 2009, 34 AADFI member – institutions subscribed to the exercise. Out of which the following five(5) institutions scored above 80% mark and were ranked as best performing in the following order: Industrial Development Corporation of South Africa (IDC); African Export – Import Bank (AfreximBank), Ibile Holdings Ltd, Nigeria; National Investment Bank Ltd, Ghana; and Swaziland Industrial Corporation (FINCORP), Swaziland. Therefore, with the successes recorded and enthusiasm in the implementation of the PSGRS in member – institutions, it is expected that all member – institutions will be part of the current exercise.

A copy of the PSGRS document comprising the Background information, Instructions manual, Rating questions and Worksheets is available for downloading from the AADFI website at www.adfi-ci.org.