Arohan Financial Services Limited | Annual Report 2021-22

eminent Independent Director, with regular administrative guidance from the Managing Director of the Company. During the year, Arohan has strengthened its risk management framework in line with the various challenges arising out of COVID-19 related events and the evolving new normal. It is mainly on account of this preparedness, that Arohan has been able to take advantage of the Revised Guidelines for the Microfinance Sector rolled out by the Reserve Bank of India and has put them into practice from the very first working day of the FY2022-23. As a direct outcome of the revised Guidelines, the metamorphosis of the MFI sector towards retail lending has been hastened, which allows Arohan to take a pole position amongst NBFC- MFIs from a Risk Management preparedness point of view. Risk Analytics, Insights and Actionable Focus Incisive Risk Analytics using various statistical tools, large data processing software and visual analytics tools such as Python, R and Tableau, allows theRiskunit ofArohan toprovidesector- leading, critical, rationale-driven business intelligence inputs to the management and the stakeholders. These inputs and insights enhance the Company’s strategic planning capabilities and provides key actionable for the Management. Arohan’s credit acquisition scorecard, ‘Nirnay’, and deployment of the scorecards in the robust credit decision platform, Strategy-One, has enabled parallel Beta testing of the platform on all microfinance customer acquisitions. The results have, in a large extent, aided to the essential and timely deployment of Credit Risk Pricing decision that has come into effect from April 1, 2022 in line with the revised guidelines of the Reserve Bank of India. Arohan’s proprietary Branch Risk (BRisk) assessment algorithm, which provides key visibility of operational risks continued to effectively assess and predict higher risk environments consistently for the challenging FY2021-22. The BRisk Grading of the entire Company at all levels up to the Branches provided the Operations team, the Management and the Board of Directors with an impartial assessment of the operational health of Arohan’s active branches while indicating potential emerging risks. New Risk Initiatives Decision Tools: With sector leading credit acquisition scorecard, ‘Nirnay’, and credit decision platform Strategy-One in place, Arohan is now actively exploring the next level of harnessing of its Data-Information Stack using the Very Large Data analytics and Machine learning. The capabilities built meticulously over the years and the strong domain expertise allows Arohan to remain amongst the best-in-class in the future on risk modelling and adopting of future-fit approaches. Ent erprise Risk Management: In order to effectively balance Risk vis-à-vis Return, and providing accurate and insightful visibility on all risks as a mandate for the Risk unit, Arohan initiated the implementation of the Enterprise Risk Management (ERM) project using the COSO framework. The project is nearing completion as the ERM platform, being developed in-house, is expected for deployment in the H1 of FY2022-23. Business Continuity Policy (BCP): In FY2021-22, the Risk unit of Arohan has spearheaded the implementation of the Business Continuity Policy and Plan of the 78 Annual Report | 2021-2022