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

More documents

Recommendations

Info

Tracking Financial Performance Standards of Microfinance InstitutionsImportance of Timely and Accurate Financial StatementsTimely production of financial records is critical. If financial information is not produced accurately andpunctually, financial ratios and assessment would not be of much use. This would lead to poor managementof the organisation and inaccurate response to operational problems leading to institutional failure.Each of the four financial statements has specific contribution to the objective of analysis of financial performance.Table 6 – Financial Statements and Possible AnalysisFinancial Statements Possible AnalysisStatement Specific Analysis in regard to Utility to MFI ManagerBalance Sheet ● Asset Liquidity Matching Overall, how are the assets being funded? Is thefinancing pattern adequate?● Asset Quality What portion of the loan portfolio (asset) is goodor bad? Are there reserves to cover these?Income and ● Sustainability Is the MFI meeting all its expenses from itsExpenditureincome? What are the trends?Statement ● Profitability Is it generating a surplus and providing returnsto its stakeholders?● Operating Efficiency Are loans being provided in a cost-effectivemanner? Are resources being used in anoptimal fashion?Cash Flow Statement ● Liquidity Is enough cash available to cover all cashobligations?Portfolio Report ● Asset Quality What portion of the loan portfolio (asset) isgood or bad?What is the nature of bad loans?The main statements i.e. the balance sheet and income & expenditure statements are taken as the base for thediscussions in this chapter. A sample of traditional financial statements (Table 7 a & 7 b) in the Indian contextis being re-produced here in the beginning to familiarise Indian Microfinance practitioners. However, for thepurpose of building the discussion on the financial statement that captures the specific features of an MFI andrequirement of different stakeholders, a more representative sample of financial statement (Table 8 a & 8 b) byexpanding conventional financial statements are also presented in this chapter for reference. This example willbe referred for all discussions in this chapter.26
Financial Statements of a Microfinance InstitutionTable 7 (A) – Conventional Income & Expense Statement of an MFIINCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED MARCH 31, 2003Figures of previous year (Rs.) Particulars Current year figures (Rs.)INCOME13,56,000 Interest 17,40,00012,000 Service charges 48,0001,04,000 Operational grant11,000 Miscellaneous income 23,00014,83,000 Total 18,11,000EXPENDITURE5,38,000 Salaries and allowances 6,08,00098,000 Rent, electricity and taxes 1,16,0001,32,000 Office Expenses 1,45,0002,02,000 Conveyance and travel 2,34,0003,78,000 Interest on loans 4,90,00063,000 Miscellaneous expenses 54,00072,000 Depreciation 62,00014,83,000 Total 17,09,000Excess of income over expenditure 1,02,000Transferred to reserveTable 7 (B) – Conventional Balance Sheet of an MFIBALANCE SHEET AS ON MARCH 31, 2003Figures of previous year (Rs.) Particulars Current year figures (Rs.)SOURCES OF FUND8,00,000 Corpus 8,00,00098,000 Reserve and Surplus 2,00,00048,69,000 Loans 84,00,0002,13,000 Current Liabilities 3,50,00059,80,000 Total 97,50,000APPLICATION OF FUND3,60,000 Fixed Assets 2,90,0001,00,000 Investments 4,00,00054,67,000 Loans 86,25,00053,000 Current Assets 4,35,00059,80,000 Total 97,50,00027
Page 2 and 3: TECHNICAL TOOL SERIES 1TRACKING FIN
Page 4 and 5: INTRODUCTION TOMICROFINANCE STANDAR
Page 6 and 7: 5. PERFORMANCE STANDARDS - CONCEPT,
Page 8 and 9: ACKNOWLEDGMENTSThe need of the oper
Page 10 and 11: Tracking Financial Performance Stan
Page 76 and 77:
Tracking Financial Performance Stan
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
Page 90 and 91:
Page 92 and 93:
Page 94 and 95:
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
TermStatement of Profit and LossStr
Page 138 and 139:
REFERENCESBarrel, Margaret, Michael
show all

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

Create successful ePaper yourself

Delete template?

Save as template?