Download - 2 nd European Microfinance Conference 2005
22ndnd European Microfinance European Microfinance Conference 2005Conference 2005
WORKSHOP« Transparency: Agreement
on basic benchmarks in Europe? »
Barcelona 28 October 2005
October 2005
ShoreBank Advisory Services International
ShoreBank Advisory Services – International
Benchmarking
ShoreBank Corporation
Largest 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 assets• Bank achieves returns equal or superior to banks of
comparable size that do not have a community banking focus
• Managed to “triple bottom line” of development impacts, conservation and profitability
Core competencies in• Financing residential real estate rehabilitation• Small business lending• Promoting wealth accumulation for lower-income families
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SASI disseminates ShoreBank’s unique experience internationally• Facilitates access to capital through the private
sector• Understands 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
ShoreBank’s International Footprint Led to Creation of SASI
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
ShoreBank’s International Organization
ShoreBank Corp(Holding Company)
ShoreBank Advisory Services
(Consulting)
ShoreBank Advisory Services
UK Ltd
Shore Overseas Azerbaijan
(Non-Bank Finance Co)
Technicalassistance
InvestmentShoreCap
International(Investment Fund)
ShoreCap Exchange
(TA Facilitator)501(c)3
ShoreBank Advisory Services
Mexico S.A. de C.V.
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CGAP Donor Guidelines
1. Outreach – How many clients are being served?
2. Depth of outreach – How poor are the clients?
3. Portfolio quality – How well is the financial institution collecting its loans?
4. Financial sustainability – ability to maintain and expand without continued subsidized donor funds?
5. Efficiency – Is the financial institution providing services at the lowest possible cost to client? 4
Developing vs. Developed
Interesting to note difference• International 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.
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Road Map to BenchmarkingDrawing from CGAP and Developing MFI
Lessons:
• Funder/Donor Requires Reporting• Coupled with capacity building, information
used by MFI to improve operations• After initial experience, becomes tool for
fundraising and marketing • Becomes a must within sector• Benchmarking and relative performance is
feasible
Funder DrivenReportingRequirement
Info used to improve operations
Becomes tool for fundraising & marketing
Benchmarking feasible
Key ratios &Reports a Sector norm
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Challenges• Volunteer Boards
• Funders/Donors without skills, capacity, interest
• Inadequate Systems
• Small and stretched management teams at MFIs
• Associations lack leverage
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Questionnaire
• What indicators do you currently report?
• Provide definitions for each• Who requires these indicators –
management, board, stakeholders, donor/funders?
• How are these indicators used?• What challenges do you face in
reporting and tracking indicators? 8
Possible Indicators:
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Outreach Number of Loans disbursedNumber of Active Clients
Depth of Outreach
Number of clients in target market (deprived, on benefits, ex-offenders, etc)
Portfolio Quality
PAR > 30
Financial Sustainability
Earned Revenues as % of Total Revenues
Efficiency Operating expense ratioNo. of Loans disbursed per loan officerNumber of active loans per loan officer