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

Tracking Financial Performance Standards of Microfinance InstitutionsExplanation of the Repayment Schedule (table-9) is given below:1. Column I of the schedule gives the installment number from 1 to 502. Column II is the principal due as per loan agreement – Rs. 20 per week3. Column III is the cumulative principal due. Take for example, Installment No 5. When the 5 th installmentis due, 5 weeks X 20 principal per week would have become due. The cumulative principal due is 100 asgiven in column III corresponding to installment 5.4. The Interest due as per schedule is 3.00 per week and it is given in Column IV.5. Column V is an important column; it gives the date on which each specific installment becomes due. Forexample, the 1 st installment becomes due 1 week after disbursement (as per loan agreement). i.e., 23/7/2002 + 7 days = 30/7/2002. This is given in Column V corresponding to 1 st installment.6. Sometimes, MFIs may offer a moratorium period. In such cases, the 1 st installment would become immediatelydue after the moratorium period.7. Column VI gives the interest due as per payment. While significance of this column is reduced for MFIscharging ‘Flat’ rates of interest, for others which use the ‘declining’ balance (Table 10) or ‘EMI’ method(Table 11), this is very relevant, especially if the client makes the repayment after the scheduled installmentdate. MFIs could use this information to calculate ‘Penalties’ or ‘Late Fees’.8. All payments coming in from clients are adjusted as per loan agreement of MFI, which stipulates thefollowing:(a) First Towards - Interest Overdues(b) Second Towards - Interest Due(c) Third Towards - Principal Overdues(d) Fourth Towards - Principal Due9. Now, as can be observed from the schedule given in Table 9, the client in the example has promptly paidall installments upto installment no 39. Hence, data in columns VII (amount paid), VIII (Int. Paid), IX(Prin. Paid) and X (Date Paid) correspond to the original schedule.10. This is also reflected by the data in column XII (Cumulative Prin. Paid) which matches the data in ColumnIII (Cumulative Prin. Due).11. Accordingly, columns XV (Interest Overdue) and XVI (Principal Overdue) report a value of ‘0’ for eachinstallment till installment number 39.12. Column XVI (Prin. Overdue) = Column III (Cum. Prin. Due) – Column XII (Cum. Prin. Paid)13. Likewise, Column XV (Interest Overdue) = Column VI (Int. due) – Column VIII (Int. Paid).14. Column XIII represents any amounts prepaid – i.e., after the using sequence ofI. Interest Overdue,II. Interest Due,III. Principal Overdue, andIV. Principal Due,and deducting amounts from clients as such, any amount (that) is left, goes to this column.52