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MIS: Requirements for a growing MFI
by Dr. Oliver Schmidt ([email protected])
Sa-Dhan, Manager – Regional Office
Presentation for RMEP “Technology for Microfinance Managers: Issues and
solutions,” 5/6 Aug 2008, Pune
Slide No. 2/17
MIS: Basic Scenario
MFI: Growth Scenario
MIS: Growth Scenario
Concluding Remarks
Presentation Outline
Slide No. 3/17
MIS: Basic Microfinance-Scenario
To know at a given point . in time (stock
data):
1.How many loan clients with outstanding loan (= active loan clients)?
2.How much accumulated principal outstanding (= Gross loan portfolio)?
3.How much of the active loans repaid in time (= Repayment rate)?
4.What is the difference between income and expenses (= profitability)?
=> Inventory; Summing up of transaction notes
To know at about a given period …. of time (flow data):
1. How many loans have been disbursed (=active loan clients)?
2. How many loans have been repaid (= inactive loan clients)?
3. How many clients have taken a succeeding loan (= active loan clients)?
4.How much loan amount has been disbursed (= accumulated lending)?
5.How much loan amount + interest/fees has been (re)paid?
6.How much income and expenses have been incurred (= profitability)?
=> Summing up of transaction notes
Slide No. 4/17
MIS: Basic Microfinance-Scenario
Sl.No. Description Cumulative
1.0 HUMAN RESOURCE
1.1 Total Number of Staff 979
1.2 Micro Finance 979
2.0 OUTREACH
2.7 Number of Members 250,688
3.0 MEMBERS
3.2 Number of Borrowers 212,048
5.0 PORTFOLIO
5.1 Number of Loan Disbursed 995,196
5.2 Amount of Loan Disbursed 4,715,550,255
5.3 Amount of Loan Repaid 3,681,167,416
5.4 Amount of Loan Outstanding 1,034,382,839
6.0 PERFORMANCE
6.1 Rate of Repayment 99.36%
Grama Vidiyal Micro Finance (P) Ltd., Consolidated Monthly Project Statement as on FEBRUARY-2008 (excerpt)
Slide No. 5/17
MFI: Growth Scenario
More Field Staff
More Locations(branches,
departments etc)
More Clients
More Transaction
Notes
More Back-Office
Staff
More Cash-flow -> More Liquidity Management
Slide No. 6/17
MFI: Growth Scenario
More Field Staff
More Locations(branches,
departments etc)
More Clients
More Transaction
Notes
More Back-Office
Staff
More Cash-flow -> More Liquidity Management
Slide No. 7/17
MFI: Growth Scenario
More Field Staff
More Locations(branches,
departments etc)
More Clients
More Transaction
Notes
More Back-Office
Staff
More Cash-flow -> More Liquidity Management
Slide No. 8/17
MIS: Growth Scenario
The task:
Provide timely and relevant data (= information)
to manage smooth and steady growth
Slide No. 9/17www.sa-dhan.org
What data is relevant to managers, and also to funders?
Management Information:• People – Competencies needed vs. available?
• Effectiveness – Are we doing the right thing?
• Efficiency – Are we doing things right?
• Profitability – Are we making money?
• Opportunity – How can we do more of the right thing, do things better, make more money?
Slide No. 10/17
How timely is timely?
Past Time
Future Time
Present Time
DailyReal-Time
Weekly
Quarterly
Annually
Weekly Weekly Weekly
Monthly MonthlyMonthly
Quarterly QuarterlyQuarterly
Slide No. 11/17
How timely is timely?
1st Rule of thumb: Cost of Risk versus Cost of Monitoring (note that monitoring includes data-management and using it)
2nd Rule of thumb: When (point/s in time) are decisions made and by whom?
3rd Rule of thumb: Are benchmarks available?
Daily
Annually
Weekly
MonthlyQuarterly
Monthly
Quarterly
FrequencyS
everi
ty(“
eff
ect
’)
Slide No. 12/17
MIS: Growth Scenario
More Field Staff
More Locations(branches,
departments etc)
More Clients
More Transaction
Notes
More Back-Office
Staff
More Cash-flow -> More Liquidity Management
Daily
Annually
Weekly
Monthly QuarterlyMonthly Quarterly
WeeklyMonthly
Efficiency Rule: Collect only data you need; use all information you generate
Slide No. 13/17
MIS: Growth scenario
ClientPortfolioAccounts Governance
Reports to- Funders,- board- Senior Mgt
Reports to- Board- Funders,- Senior Mgt- Branch Mgt
Reports to- Senior Mgt- Branch Mgt- Field Staff
- Vision/Mission statement
- Strategic Objectives/ Plan
- Annual Business Plan
Contact-, profile-livelihood-data
Loan-, Savings-Data
Accounting-data
Reporting-,Decision Making
Policies
The four pillars of a comprehensive MIS
Slide No. 14/17
MIS: Growth scenario
Sustainability and Profitability 3 Ratios*R1 Operational Self-Sufficiency (OSS)
R3 Return on Equity (ROE)*
Asset/Liability Management 5 Ratios*R4 Yield on Gross Portfolio
R7 Debt to Equity
Portfolio Quality 3 Ratios*R9 Portfolio at Risk (PAR) Ratio
Repayment Rate
Efficiency and Productivity 10 Ratios* R12 Operating Expense Ratio*
R14 Borrowers per Loan Officer
Total Expense Ratio
Ratios recommended internationally (SEEP); benchmarked by Sa-Dhan
*In addition adjusted version are suggested; also break up R12 by components is suggested
Slide No. 15/17
MIS: Growth scenario
MIFOS – BRANCH REPORT
Slide No. 16/17
1. From your strategy, deduct SMART-targets (stock data) for 1-3 years; from the SMART-targets, deduct growth targets (flow data)
2. Identify Decision makers (including monitoring) in charge of each (stock and flow) target
3. Define ideal report – relevant and timely data – for each decision maker
4. Define minimum report – relevant and timely data – for each decision maker
5. Choose MIS-solution based on the reporting requirements
6. Build your business processes accordingly and insistently
Concluding Remarks
6 Steps to capture the MIS-requirements of a growing MFI:
Slide No. 17/17
I am lookingforward to our discussion
Thank you very muchfor your attention
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