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

Tracking Financial Performance Standards of Microfinance InstitutionsExplanation of Portfolio Report (Table 13) is given belowExplanation of each row (1 to 15) of Portfolio related Data for the Year ending March 31,2001, March31, 2002 & March 31, 2003, is provided here1. Total Value of Loans Disbursed during the Period – Refers to the total value (in currency) of loansdisbursed in a specific time period regardless of whether they are performing, non-performing or writtenoff. This value should not be confused with gross loan portfolio, which can be several times less than thevalue disbursed. (See Column II, Row P1).2. Total Number of Loans Disbursed during the Period – Refers to the total number of loans disbursed in aspecific time period. For MFIs using a group lending methodology, the number of loans should refer tothe number of individuals receiving part of a group loan, unless the MFI specifies a different definition.(See Column II, Row P2).3. Number of Active Borrower (end of period) - Refers to the number of borrowers with one or more loanin force that have neither been fully repaid nor written-off. Borrowers, who have repaid their loan in full,are not considered in this number. The number of active borrowers will be lower than the number of loanoutstanding, if some borrowers have more than one loan. (See Column II, Row P3).4. Average Number of Active Borrower – Refers to the average no. of active borrowers (as defined above)over a period. Average number of active borrowers can be estimated by taking the no. of active borrowersat the first date of the period and adding the no. of active borrower at the last date of the period anddividing the sum by two. (See Column II, Row P4).5. Value of Loans Outstanding (end of period) - Refers to the current value (in currency) of loans still notpaid at a specific date. It differs from the “Total Value of Loans disbursed during the period” and itconsider just the amount that is currently owed to the organisation. In other words, only unpaid principalbalance of loan disbursed is included in Value of Loans Outstanding. (See Column II, Row P5) {for detailssee section 3.3.2.1 (c) in chapter 3}.6. Average Outstanding Balance of Loans - Refers to the average value (in currency) of loans outstandingover a period. Average Outstanding Balance can be estimated by taking the opening balance of loansoutstanding at the first date of the period and adding the closing balance of loans outstanding at the lastdate of the period and dividing the sum by two. (See Column II, Row P6)In order to increase the accuracy of this calculation, the balance of loans at the end of any given interval(midway through the period, end of each month, etc.) can be used, provided, the total figure is dividedby the number of intervals used.For example, to determine the Average Outstanding Balance for a 12-month period using monthlyintervals, the outstanding balance at the end of each month would be added together and the total figuredivided by 13.As per our example, for year 2002, the average outstanding balance of loans (as the approximate formula)is (104,000 + 140,000)/2 = 122,000. (Row P5 and Column IV). While for cursory analysis, one may usethe approximate formula of opening balance plus closing balance and dividing this by 2, it is imperativethat from a best practices perspective, the accurate formula of adding all month end balances with theopening balance and dividing by 13 is followed.7. Value of Payments in Arrears (end of period) - Refers to the value (in currency) of payments in arrears –payments that have been due and not paid. This figure includes principal only that has become due but hasnot been received as of the end of the period. (See Column II, Row P7)66