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sanctuary trading can be very profitable moreover by way of bonus or appeal takings, or by assets gains from auction of securities to third parties. However, it also carries alot of exposes. If these exposes are not right handled , sanctuary trading can veer out to be very unprofitable. This minusons was accepted out in order to supply information to the mounting micro finances in the fiscal assets of Cameroon, Douala, tired from the COFINEST S.A experience in the investment sector (partnership with Western Union, USA ) The main exposes open contain the standing expose, advertise expose and appeal worth expose.

The trust expose involved is the probability that the client of the sanctuary may bomb to honour his financial obligations. This may take the form of bombure to rescue the sanctuary or bombure to pay the appeal or bonus as flat. In most luggage, trust expose happen as a upshot of a decline in the financial take of the company. standing expose is very nominal or non-ongoing for government securities. However , the reveers from such securities are also very low.

The promote expose is the expose that some developments may happen , moreover in the securities in promote or the wealth that makes it tiring for the bank to promote the sanctuary, bebegin it has become minus appealing to investors. For example, unforeseen distress of a particular sector can begin a acid decline in the want for securities rised by companies in that sector. This is what happened to the securities of most Cameroonian banks and microfinances in the belated 1990s , bebegin of perceived distress in the financial sector. In such a folder, securities can only be sold at a markdown.

The appeal worth expose happens bebegin of the deviation in appeal worth. It is the probability that the promote worth of securities may accident as a upshot of appeal worth increases. earlier theories by Keynes have proven that the worth of financial assets change inversely with appeal worths. then ,the elevated the appeal worth the minus the worth of the sanctuary seized. This is also bebegin while the token worth (contractual worth) of securities is flat , promote worth may change. As such the offering yield, which is obtained by isolating the token worth by the promote penalty, varies.

therefore looking at the framework policy , just like the lodge of directors of banks formubelated universal policies layer its areas of business , with penaltys for the loan , there is regularly a necessary for the stated policies to be put in place for the bank’s investment. Such policy will among other clothes , help the investment officials in deciding the category, adulthood , value and dimension of securities to invest in. The proportion of bank funds to be allocated to the investment account will depend on the assets allocation accost. But the investment policy will give the investment official a more definite guide.

distant from guiding the officials on the variety of securities in the bank portfolio, it helps to guide them on the diversification of securities in the investment portfolio. A well-diversified investment portfolio lower the expose inherent in investment. In this folder we think of the COFINEST S.A diversified investment in the ”Cofinix sedan, prudentia, compte particulier, trekker’s cheque , western union etc”. As such the rise of diversification in language of sector , riser , adulthood, category and geographical locations are commonly containd in the investment policies.

A bank may conclude to board on aggressive , liberal or a conservative investment policy. The category to be adopted will depend on the bank’s objective , takings and the demolish of the bank’s offering and likely expose exposure. For example , a bank that is already greatly exposed to liquidity exposes in loans and other assets will statedly pursue a conservative investment policy.

Preferably , investment policy should be in prose. This will help to guarantee uniformity and consistency in its application. However, it should be variable enough to give space for the use of initiatives , and for calm adaptation to changes in the environment.

lastly , to guarantee that the investment policy does not end up as a sheer paperwork, appropriate machinery must be set on gesture for its implementation. Authorities should be definite , and responsibilities assigned to definite officials or departments. There should be a provision for the appraisal and journal of such policy