Objectives

The primary objective of this tender is to source a qualified service provider to develop risk exposure limit models for the Development Bank of Southern Africa (DBSA). These models aim to quantify, monitor, and manage credit and equity investment risks across sectors, countries, obligors, and specific asset classes. The models will support strategic decision-making, enhance portfolio management, ensure regulatory compliance, and strengthen the organization’s resilience against global uncertainties.

Scope

The scope of work includes:

• Developing risk exposure limit models/frameworks for credit risk and equity investment risk, considering key risk indicators such as financial ratios, macroeconomic and geopolitical factors, governance assessments, and existing data sources.
• Creating specific models for:
• Country exposure limits: Incorporating economic, political, social indicators, default and recovery rates, and geopolitical risks.
• Single obligor/counterparty limits: Assessing individual obligor risks, industry-specific risks, concentration, and historical performance.
• Data review, cleansing, normalization, and integration from internal and external sources.
• Model validation, testing, sensitivity analysis, and documentation.
• Providing training, capacity building, and implementation support to ensure effective adoption.
• Establishing ongoing monitoring systems and reporting frameworks for model performance.

Technical Requirements

The technical requirements for the service provider include:

• Proven experience in developing, maintaining, and training on risk exposure limit models within the financial services sector, especially in development finance institutions or commercial banks.
• Demonstrated understanding of regulatory frameworks such as Basel Regulations and banking compliance standards.
• Ability to provide references from similar projects, including contactable client references from development finance institutions or banks.
• Qualified personnel with relevant expertise, supported by CVs highlighting experience in model development, risk management, and regulatory compliance.
• Clear project management methodology, approach, and detailed plan to deliver all phases within the stipulated timelines.
• Comprehensive documentation covering methodologies, data sources, assumptions, validation processes, and user guides.
• Capacity to deliver training and support for staff to operate and maintain the models effectively.
• Implementation support for integrating models into existing risk management frameworks and establishing performance monitoring systems.