Read - Sa-Dhan

CONCLUSIONS
29. For CDFIs, the nature and intensity of funds management and cyclical engagement with bulk
funders is becoming a critical management issue.
In conclusion, the analysis shows that –
• Operational self sufficiency is driven by geographic concentration of clients and financial costs.
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Repayment from clients can be improved only through measures and investments that invite higher
costs. CDFIs that have better CRR also incur higher costs.
MACs are emerging as a financially viable model centrally driven by concentration of clients and low
operating costs.
Managing portfolio quality remains critical. CDFIs with PAR >60 days at around 3% have good
financial performance on other parameters. Keeping Portfolio at risk > 60 days within manageable
limit of 3% would be a good strategy.
Medium size CDFIs have distinct set of issues to deal with. This ranges from asset-liability matching
to operational improvements. Clearly, managing growth is crucial to maintain operational
sustainability.
The high-growth CDFIs show that high rate of growth affects repayment (CRR). Concentration of
institutional focus on achieving high targets for disbursement probably results in less staff time in
ensuring that repayment rates are maintained.
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The nature and intensity of funds management and cyclical engagement with bulk funders is
becoming a critical management issue.
As the sector grows, CDFIs expand their client outreach and loan asset portfolio systemic improvements
would be the key drivers to financial efficiency.
29
Sa-Dhan The Association of Community Development Finance Institutions