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

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Tracking Financial Performance Standards of Microfinance Institutions2. From the portfolio report, calculate the average outstanding portfolio during the period (for instance, ayear) using the following procedure:F Divide the period (year) into appropriate sub-periods – for example, a year could be divided into 12sub-periods of a month each (see Table 14 below)F Take the actual loans outstanding at the beginning of the period (say April 1, 2001)F Add to this the sum of loans outstanding at the end of each sub-period (i.e., month)F Then compute Average Loan Outstanding as followsAverage Loan Outstanding (During Period) = B + E1 + E2 +E3+ ... E 12133. Divide Operating Costs during period by Average Loans Outstanding to get the Operating Cost RatioTable – 14 Process for Computing Average Loan OutstandingApril 1, 2002 Actual Loan Outstanding at Beginning of Period B1April 30, 2002 Actual Loan Outstanding at End of Sub-Period 1 E 1May 31, 2002 Actual Loan Outstanding at End of Sub-Period 2 E 2June 30, 2002 Actual Loan Outstanding at End of Sub-Period 3 E 3July 31, 2002 Actual Loan Outstanding at End of Sub-Period 4 E 4August 31, 2002 Actual Loan Outstanding at End of Sub-Period 5 E 5September 30, 2002 Actual Loan Outstanding at End of Sub-Period 6 E 6October 31, 2002 Actual Loan Outstanding at End of Sub-Period 7 E 7November 30, 2002 Actual Loan Outstanding at End of Sub-Period 8 E 8December 31, 2002 Actual Loan Outstanding at End of Sub-Period 9 E 9January 31, 2003 Actual Loan Outstanding at End of Sub-Period 10 E 10February 28, 2003 Actual Loan Outstanding at End of Sub-Period 11 E 11March 31, 2003 Actual Loan Outstanding at End of Sub-Period 12 E 1213 Data Points Actual Loan Outstanding Amount Sum of B1 +E1 + E2 + … E1290
Performance Standards - Concept, Definitions, Calculation and Methodological IssuesThe calculation of Operating Cost Ratio from financial statements is illustrated below:Step 1 – Use the formula given belowOperating Costs_________________________________________________________Average Loan Portfolio OutstandingStep 2 - Take the Operating Cost for Year 2001 – it is 21,800 {refer Table 8 (a), IS 20) for Year 2001}Sl. Description 2001 2002 2003IS 20 Total Operating Costs (A) 21,800 26,200 28,600Numerator of FormulaStep 3 - Take the Average Loan Portfolio Outstanding for Year 2001 – it is 90,000 (refer to Portfolio Report –Table 13, P6 for Year 2001)Sl. Description 2001 2002 2003P6 Average Loan Portfolio Outstanding (B) 90,000 122,000 150,000Denominator of FormulaStep 4 - Divide Operating Cost by Average Loan Portfolio Outstanding and as shown below, we getOperating Cost Ratio as 24.22% for year 2001Operating Cost Ratio 2001 2001 2002Operating Cost (A) 21,800 26,200 28,600Average Loan Portfolio Outstanding (B) 90,000 122,000 150,000Operating Cost Ratio Value = A/B = 24.22% 21.48% 19.07%Step 5 - Likewise, as given above, Operating Cost Ratio for Years 2002 and 2003 are 21.48% and 19.07%respectively.91
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TECHNICAL TOOL SERIES 1TRACKING FIN
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INTRODUCTION TOMICROFINANCE STANDAR
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5. PERFORMANCE STANDARDS - CONCEPT,
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ACKNOWLEDGMENTSThe need of the oper
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Tracking Financial Performance Stan
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