Social Impact Assessment of Microfinance Programmes - weman

management reveal the significance of this instrument in their analysis for planning and
expansion.
The general culture of SAFWCO is to meet with clients to understand their issues and
respond to them by making changes in programme strategies. It has a strong internal
Monitoring and Evaluation team which generates regular reports on programme targets
and efficiency for General Managers and governance; these also form the basis for future
planning. This indicates that there will be a conscious use of analytical reports when the
MIS will be operationalized. Moreover, it is also seen as a tool for strengthening the loan
tracking and screening mechanism.
6.1.8.3 Financial and Operational Sustainability
As indicated above, service charges on credits become the key source for meeting
operational expenses. SAFWCO also receives a line of credit from the Pakistan Poverty
Alleviation Fund (PPAF) worth Rs.13 million under which operation costs and staff
salaries are covered for three years. While it is very likely that PPAF would extend this
contract, however, SAFWCO has developed its endowment fund. There exists a
revolving fund which is in the form of direct contribution from founding members and is
used for new initiatives and asset development.
Despite these initiatives, the indicators for financial and operational sustainability need to
improve tremendously. Although the expense ratio has decreased over the past two years,
it is comparatively high with 32.9 percent when compared with other FSS MFIs 22
percent and for all MFIs in Asia 23.2 percent. Similarly, the operating expense ratio is
also high at SAFWCO – 32.2 percent – as opposed to 15.5 percent of all FSS and all
Asian – 12.6 percent. The current profitability ratios for SAFWCO are low with FSS
standing at 57.9 percent and Operational Self sufficiency is rated as 59.32 percent.
SAFWCO has -16.45 percent Return on Assets and -60.98 percent Return on Equity.
6.1.8.4 Research and Development
SAFWCO follows its legacy of grass roots participation and reflection and thus maintains
research at the core of programme development. It regularly conducts research studies in
the programme areas of the organization or at a wider provincial level as needed.
Research is seen as a better means of learning from past experiences, improving upon
service delivery, planning and allocation of resources, and demonstrating results as a part
of accountability to key stakeholders. While a combination of tools, including
Participatory Rural Appraisal techniques, statistical and quantitative analysis and case
studies are employed, the foci of research are multi-disciplinary and look into poverty
alleviation, socio-economic development and institutional reforms.
Evaluative research also takes an important place in SAFWCO’s overall strategy. It has
identified three levels of evaluation ranging from outcome mapping and assessment to
impact analysis. Research is also featured in the core responsibilities of all programme
employees who are encouraged to keep field journals and accounts to capture their
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