Sustainable Microfinance - Balanced Scorecard's added value for ...

MB that has to do with you financial prognoses and especially for yourself. In the end it is interesting
whether people will hire others. That is very interesting.
MB how important is that for really the start?
MB It is important that you think about how you can become sustainable, but how important is it whether
you will hire people in a couple of years?
CS But if someone after three years still didn't make it... I think you should also look at that.
CS you can see it by the financials that is where you see your income and your costs. That way you can
tidy take that away from the potential of the business.
CS after two years, your company should have grown from 1 FTE to 1.8 FTE. That are factors that
determine whether the necessary growth is there.
CS at some point they have to be able to hold up their own pants. That is how it works, and that is
something you can do or not. It can take a year or two.
CS Similar with when you win the lottery. That you are put right away under some management, because
people do not know what to do with that kind of money and that all of a sudden everybody is their
friend.
CS It has to lead to something and you really have to work for it.
CS I think you can see that by the figures, the financial figures.
CS A bank will also ask your annual reports and there should be some growth.
CS There are curtain models for entrepreneur, where they should have setup their business within 1-5
years.
CS it used to be that you have to invest a lot in the first three years, but after three years you need to start
making money. That growth curve needs to be there.
CS get somebody to work, so he can get other people to work, that they are out of that circuit and can
become sustainable, able to pay for his one cost of living.
AP Somebody has an idea and than they do the same. Those people create a stiff competition for each
other
AP It is not going to be a very profitable business, they will be able to repay their loan, they will have
something left, and because they had nothing everything that will be left is a substantial improvement
AP There are people that have an entrepreneurial spirit and manage to build something
AP Most people are already happy that they can get a loan. That loan is not always used to start up a
business,
AP you can also get a loan and use is for a flat screen television to put it oddly, but it happens. Maybe not
a flat screen television but the marriage of the daughter.
AP It is all about survival, staying alive. If those people would have the choice, than they would not be
entrepreneurs.
AP They would prefer to have a steady job, but those are not available, so to stay alive they will have to do
something. In developing countries that is 99% of the people.
AP There a lot of people had too much loans and just couldn't pay back anymore, causing the MFIs to
default.
AP There is a gap between MFI and big banks. In between it is difficult to find finance, which is also the
gap where more the real entrepreneurs are, the SME.
AP The missing middle, loans of !10.000 - !100.000. Those amounts are too big for the MFI and too small
and risky for the mainstream banks. That is the birth room of entrepreneurship.
AP the focus should be on that group, because they have the most growth potential,
AP everybody that is in the missing middles comes from the microfinance sector. How do you make sure
that from the microfinance those people flow to the next level?
Elmar Hoogendoorn 116
Sustainable Microfinance