Development Finance Institution Review

Country: South Africa

ASI was awarded a multi-million Rand project by the National Treasury of South Africa to review the mandates and operations of the portfolio of 12 Development Finance Institutions (DFIs) (including DBSA, IDC, Land Bank). The large multi-disciplinary team of financial and analytical experts engaged all institutions in analysing aspects of the DFIs' legal mandate and the broader legislative framework and their operations (including loan portfolio, risk management etc). Our team reported directly to the Executive Authority on the project (a Cabinet Committee chaired by Trevor Manuel, Minister of Finance) in order to formulate a comprehensive DFI policy.  In this respect, specific tasks included:

  • Detailed assessment of DFI mandates within overall legislative framework for long-term development finance;
  • In-depth analysis of finance operations (loan portfolio, NPLs, recovery rates, risk management);
  • Assessment of internal capacity to meet mandates (however vague) including skills assessment, efficacy of prevailing operational systems and processes;
  • Assessment of the efficacy of pre-existing governance arrangements vis-à-vis GoSA / NT;
  • Articulation of recommendations for reform including rationalisation of mandates, measures to bring about improved financial management to foster greater sustainability and improvements for long-term capacity building. All such recommendations have contributed towards the formulation of a comprehensive policy for development finance in South Africa.