Course objective:
An important aspect has been the increasing use of financial and institutional indicators to measure the risk and performance of microfinance institutions (MFIs). This course will provide participants with an understanding of the different aspects and tools used by MFIs, what they mean, and how they can be used to put the key performance indicators into context.
Course audience:
Management and officers of microfinance institutions, finance managers and credit officers
Course Contents:
PUTTING THE INDICATORS INTO CONTEXT
- Portfolio Quality
- Efficiency and Productivity
- Financial Management
- Profitability and Sustainability
- Asset/Liability Management
PORTFOLIO QUALITY
- Portfolio at Risk (PAR)
- Risk Coverage Ratio
- Write-Off Ratio
- Provision Expense Ratio
EFFICIENCY AND PRODUCTIVITY
- Operating Expense Ratio
- Cost Per Borrower
- Borrowers per Loan Officer / Branch Manager (Loan Officer Productivity)
- Active clients per staff member (Personnel Productivity)
- Client Turnover
- Average Outstanding Loan Size
- Average Loan Disbursed
FINANCIAL MANAGEMENT
- Funding Expense Ratio
- Cost of Funds Ratio
- Debt/Equity Ratio
PROFITABILITY AND SUSTAINABILITY
- Operating Self-sufficiency (OSS)
- Financial Self-Sufficiency (FSS)
- Return on Equity (ROE)
- Return on Assets (ROA)
ASSET/LIABILITY MANAGEMENT
- Portfolio Yield
- Portfolio to Assets
- Cost of Funds Ratio (Adjusted Cost of Funds Ratio)
- Debt to Equity, (Adjusted Debt to Equity)
- Liquid Ratio
