Tracking Financial Performance Standards of ... - Sa-Dhan

Tracking Financial Performance Standards of Microfinance InstitutionsSl.No.Name ofTool/Institution2. Microfinance InformationExchange (MIX)MIX is a not for profitprivate organisation thatsupports the growth &development of a healthyMicrofinance sector.Through its publication -Micro Banking Bulletinthat is one of the principaloutputs of Micro bankingstandards project fundedby CGAP, it collectsfinancial & portfolio dataprovided voluntarily byMFIs, primarily to helpMFI managers and boardmembers to understandtheir performance vis-a-visother MFIs.Secondary objectiveincludes establishingindustry performancestandards and enhancetransparency of financialreporting of MFIs worldwide.To address the issue ofdiversity in operatingenvironment of MFIs,while comparing thefinancial and portfoliodata, it has adopted a peergroup framework, wherefinancial performance ofMFIs are compared amongpeer group members on 7broad parameters.Broad performance areaInstitutional maturity, size andoutreachProfitability and SustainabilityIncome and ExpensesEfficiencyProductivityPortfolio qualityCapital and Liability structureIndicators to measure performance• Age of institution• Number of offices• Number of personnel• Number of active borrowers• Percent of women borrowers• Adjusted return on Assets• Adjusted return on equity• Operational self-sufficiency• Financial self-sufficiency• Adjusted profit margin• Adjusted operating income ratio• Adjusted total expense ratio• Yield on gross portfolio• Yield on gross portfolio (real)• Adjusted financial expense ratio• Adjustment expense ratio• Loan loss provision expense ratio• Adjusted personnel expense ratio• Adjusted administrative expense ratio• Adjusted operating expense ratio• Adjusted operating expense / Loan portfolio• Adjusted personnel expense / Loan portfolio• Adjusted administrative expense/Loan portfolio• Average salary / GNP per capita• Personnel productivity(No. of active clients/No. of all staff)• Loan officer productivity(No. of clients/No. of loan officer)• Personnel allocation ratio(No. of loan officer/No. of staff)• Average outstanding loan size• Depth(Avg. outstanding loan size/GNP per capita)• Portfolio at risk (> 30 days)• Portfolio at risk (> 90 days)• Commercial funding liabilities ratio• Capital / Asset ratioSource: Micro-Banking Bulletin (November 2002)104