2 nd European Microfinance Conference 2005 WORKSHOP « Transparency: Agreement on basic benchmarks in Europe? » Barcelona 28 October 2005

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<ul><li><p>2nd European Microfinance Conference 2005WORKSHOPTransparency: Agreement on basic benchmarks in Europe?</p><p>Barcelona 28 October 2005</p><p>#1</p></li><li><p>ShoreBank Advisory Services InternationalBenchmarking</p><p>October 2005ShoreBank Advisory Services International</p><p>#1</p></li><li><p>ShoreBank CorporationLargest development finance institution in U.S. Founded in 1973 to maintain banking services and arrest decline in Chicago community Has grown to $1.7 billion in assetsBank achieves returns equal or superior to banks of comparable size that do not have a community banking focusManaged to triple bottom line of development impacts, conservation and profitability</p><p>Core competencies inFinancing residential real estate rehabilitationSmall business lendingPromoting wealth accumulation for lower-income families</p><p>1</p><p>#1</p></li><li><p>ShoreBanks International Footprint Led to Creation of SASISASI disseminates ShoreBanks unique experience internationallyFacilitates access to capital through the private sectorUnderstands the specific requirements of communities with constricted access to capital. Creates relationships with entrepreneurs and businesspeople in developing communities by being part of that community </p><p>Our International consulting business began when Muhammad Yunis of Grameen Bank asked us to go to Bangladesh and work with him on risk management and lending in disadvantaged communities 2</p><p>#1</p></li><li><p>ShoreBanks International OrganizationShoreBank Corp(Holding Company)ShoreBank Advisory Services(Consulting)ShoreBank Advisory ServicesUK LtdShore Overseas Azerbaijan(Non-Bank Finance Co)TechnicalassistanceInvestmentShoreCap International(Investment Fund)ShoreCap Exchange(TA Facilitator) 501(c)3ShoreBank Advisory ServicesMexico S.A. de C.V.3</p><p>#1</p></li><li><p>CGAP Donor Guidelines Outreach How many clients are being served?Depth of outreach How poor are the clients?Portfolio quality How well is the financial institution collecting its loans?Financial sustainability ability to maintain and expand without continued subsidized donor funds?Efficiency Is the financial institution providing services at the lowest possible cost to client?4</p><p>#1</p></li><li><p>Developing vs. DevelopedInteresting to note differenceInternational Donors (DFID, KfW, FMO, AFD, EBRD) require performance based reporting and link further funding to assessments.The consultants and investors from Europe into developing microfinance do the same (IPC, Bank Akademie, Planet Finance, ShoreCap, Oikocredit) Yet US and UK CDFIs have taken longer to provide similar levels of reporting and benchmarking Donor/Funders in developed countries have taken a gentler approach. NCCA took 20 years to introduce CARS.5</p><p>#1</p></li><li><p>Road Map to BenchmarkingDrawing from CGAP and Developing MFI Lessons:</p><p>Funder/Donor Requires ReportingCoupled with capacity building, information used by MFI to improve operationsAfter initial experience, becomes tool for fundraising and marketing Becomes a must within sectorBenchmarking and relative performance is feasible Funder DrivenReportingRequirementInfo used to improve operationsBecomes tool for fundraising &amp; marketingBenchmarking feasibleKey ratios &amp;Reports a Sector norm6</p><p>#1</p></li><li><p>ChallengesVolunteer Boards</p><p>Funders/Donors without skills, capacity, interest</p><p>Inadequate Systems</p><p>Small and stretched management teams at MFIs</p><p>Associations lack leverage 7</p><p>#1</p></li><li><p>QuestionnaireWhat indicators do you currently report?Provide definitions for eachWho requires these indicators management, board, stakeholders, donor/funders?How are these indicators used?What challenges do you face in reporting and tracking indicators?8</p><p>#1</p></li><li><p>Possible Indicators:9</p><p>#1</p></li></ul>


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