Social Impact Assessment of Microfinance Programmes - weman

are also working on a marketing plan for funds mobilization. The Board also tries to
identify partner organizations which can help with bringing in funds.
5.1.6.2 Asset, Liability and Equity Composition
Akhuwat’s asset utilization (percentage of assets comprising loan portfolio) is around 78
percent and this is better than the industry average of 42.5 percent. This high rate of asset
utilization will allow Akhuwat to increase its profitability rather than leaving the assets
idle as cash. Akhuwat has very few liabilities as it does not borrow to finance its
microfinance operations. Its operations are exclusively financed by grants and donations,
and over the years, Akhuwat has received more than Rs.60 million as grants. Last year
Akhuwat received almost Rs.30 million (Figure 5.3) in grants and this was an increase of
158 percent on the previous year.
Figure 5.3
Millions
30
25
20
15
10
5
0
Grants received
28.35
10.99
7.15
0.97 1.82
2002 2003 2004 2005 2006
Year
5.1.6.3 Profitability and Sustainability
The organization’s performance on profitability and sustainability has been steadily
improving. However, as Akhuwat does not charge any interest on its loans, and only
charges a membership fee of 5 percent, it is unable to cover its costs which stand at 7
percent. Nonetheless, as Akhuwat increases its outreach it will be able to lower the cost
and in time will be able to cover its operating expenses. Similarly, OSS and FSS were 77
percent for 2006 and show that Akhuwat is not sustainable at the present as it cannot
cover its operational and financial expenses. But, Akhuwat’s operational efficiency is
very high at 7.13 percent, while the industry average is 22.4 percent. In this regard,
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