Handling Fraud

Whenever an organisation is required to manage large numbers of cash transactions, minimising fraud is of a critical value. VisionFund takes the operational risk of fraud very seriously and is continuously working to minimise fraud at all levels.

Within VisionFund's risk management approach, fraud is minimised through proper operational controls, global and regional systems of checks and balances that limit and warn of fraud occurring in a timely manner, immediate reporting as well as internal and external auditing.  World Vision discloses fraud losses incurred in VisionFund network operations during the year in their Annual Accountability Report. These are low by industry standards but we remain vigilant.

VisionFund continues to innovate. Cashless banking and Internet-connected real time loan processing have been introduced, increasing efficiency and further reducing the risk of fraud. When fraud is detected, VisionFund acts swiftly in accordance with its zero tolerance policy.

During the 2013 Fiscal Year, based on information obtained from investigations performed by VisionFund Operations teams, Global Centre Internal Audit and routine VisionFund Monthly Management Reports, the total confirmed fraud loss for the VisionFund network was US $1.3 million. 

This represented 0.2% of assets, which VisionFund management believes is low for the global microfinance industry.

Included within the figure was a series of related frauds in Kosovo. Following discovery of these frauds, local management in Kosovo has been changed and a comprehensive review of internal controls in the MFI has been carried out to identify improvements that have now been implemented.

Without the Kosovo incident, fraud losses would have been less than 0.1% of total assets in line with VisionFund’s experience in the prior fiscal year. This level is regarded as excellent within the industry and is testament to the amount of effort and attention that VisionFund pays to this important issue.