Effective Supervision:Effective Supervision:
Reading and Analyzing the Reading and Analyzing the MIS ReportsMIS Reports
MICROFINANCE MANAGEMENT MICROFINANCE MANAGEMENT DEVELOPMENT WORKSHOPDEVELOPMENT WORKSHOP
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Session ObjectivesAt the end of the session, participants are expected to:
• Have a fresh understanding and appreciation of microfinance reports
• Be able to read and analyze the important microfinance reports
• Understand the relationship of data across reports
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Introduction
• Appropriate, accurate and timely reports and indicators greatly contribute to the participating banks’ success in microfinance and in making microfinance a part of the regular banking operation.
• It is important for middle management to know how to read and understand the reports in order to make the right and timely decision.
• It is important to know the relationship of data across reports to be able to spot errors and detect fraud.
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MABS Monitoring ReportsMABS Monitoring Reports Listing of Loans Collection Due Report Delinquency Report Portfolio at Risk Report
Indicates loan portfolio data and quality
Indicates revenue, growth and performance.
Analyze quality based on client, business and characteristics..
Interest Collected by MF Unit Performance Report by AO Microfinance Monthly Report Client Status Report
PAR by Aging and Business Activity PAR by Loans Disbursed and Business
Activity Loan Profile by Gender
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Listing of Loans (Monthly)
• List of all active accounts; accounts with outstanding balance – current or overdue
• Shows static information such as; borrower’s name and account number, loan cycle, release and maturity date, amount borrowed, outstanding loan balance, amortization due, and hold out deposits
• It also shows amount overdue and portfolio at risk (PAR) amount
• Users: – MF Unit supervisor and staff, branch manager
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Listing of Loans (Monthly)
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Delinquency Report1 (Daily)
• List of delinquent accounts; missed amortization repayment for 1 day or more
• Shows static information such as; borrower’s name and account number, release and maturity date, PAR amount, total amount due
• It also shows the number of amortization payments missed and how many days the borrower is overdue
• This report shows the hold out balance and the exposed amount.
• Users: – MF Unit supervisor and staff, branch manager
1Delinquency report is an exception report
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Delinquency Report1 (Daily)
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Exposed Amount
• Refers to the difference between the outstanding loan balance and the savings balance.
• This amount bears the risk of not being collected.
• The exposed amount represents the amount the clients still owes to the bank after her/his savings have been applied to the loan amount due
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Portfolio at Risk Report (Daily, Weekly, Mo.)
• This is a summary report showing the number of borrowers, loan amount overdue, outstanding balance or PAR amount by age.
• Also shows the percentages e.g. % clients, % in arrears, and PAR %
• Users: – MF Unit supervisor and staff, branch manager, top
management
PAR ReportRURAL BANK OF ABCPortfolio at Risk Report
As of June 30, 2010
Days Overdue
No. of Borrowers
% of ClientsLoan Amount
Overdue% in Arrears
Outstanding Balance
Outstanding Balance %
Current 438 96.26% - 0.00% 2,945,840.57 96.37%
1-7 days 8 1.76% 5,302.58 0.17% 52,314.64 1.71%8-14 days 3 0.66% 1,994.03 0.07% 14,505.39 0.47%15-30 days 2 0.44% 8,571.44 0.28% 30,666.70 1.00%31-60 days 2 0.44% 6,567.70 0.21% 6,820.11 0.22%61-90 days 0 0.00% - 0.00% - 0.00%Over 90 days 2 0.44% 6,855.02 0.22% 6,538.31 0.21%
Subtotal 17 3.74% 29,290.77 0.96% 110,845.15 3.63%
Total 455 100.00% 29,290.77 0.96% 3,056,685.72 100.00%
PAR 7RURAL BANK OF ABCPortfolio at Risk Report
As of June 30, 2010
Days Overdue
No. of Borrowers
Outstanding Balance
Outstanding Balance %
Current 438 2,945,840.57 96.37%
1-7 days 8 52,314.64 1.71%8-14 days 3 14,505.39 0.47%15-30 days 2 30,666.70 1.00%31-60 days 2 6,820.11 0.22%61-90 days 0 - 0.00%
Over 90 days 2 6,538.31 0.21%
Subtotal 17 110,845.15 3.63%
Total 455 3,056,685.72 100.00%
PAR 7 = 1.91% with 9 accounts
(Delinquent loans over 7 days)
PAR 30RURAL BANK OF ABC
Portfolio at Risk Report
As of June 30, 2010
Days Overdue
No. of Borrowers
Outstanding Balance
Outstanding Balance %
Current 438 2,945,840.57 96.37%
1-7 days 8 52,314.64 1.71%
8-14 days 3 14,505.39 0.47%
15-30 days 2 30,666.70 1.00%
31-60 days 2 6,820.11 0.22%
61-90 days 0 - 0.00%
Over 90 days 2 6,538.31 0.21%
Subtotal 17 110,845.15 3.63%
Total 455 3,056,685.72 100.00%
PAR 30 = 0.44%with 4 accounts
(Delinquent loans over 30 days)
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Total Interest Collected from MFU (Monthly)
• This is a summary report showing the monthly growth of the loan portfolio (outstanding balance: beginning & ending).
• Shows the interest, fees & other charges, and the total revenue collected within the period; usually monthly
• Shows the yield % for the period
• Users: – MF Unit supervisor and staff, branch manager, top
management
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Formula for YIELD %
Total Revenue
(OLP1 beginning + OLP End)/2YIELD % =
1 Outstanding Loan Portfolio
Total Revenue = Interest Income + Fees and Other Charges
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Total Interest Collected from MFU (Monthly)
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Performance Report by Account Officers (Weekly, Monthly)
• This is a summary report that determines the performance of each account officer (AO)
• Shows the # of borrowers handled by an AO, loan balance, # of accounts that are overdue, par amount and percentage
• It also shows the # of new and repeat loans released during the period and the total revenue generated by the AO
• Users: – MF Unit supervisor and staff, branch manager, top
management
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Performance Report by Account Officers (Weekly, Monthly)
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Client’s Status Report (As needed)
• This report shows the credit history of the borrower
• Shows the # of loans the borrower has availed
• Shows the repayment performance of the borrower: percentage payments made on time
• Shows the detailed repayment performance of the borrowers current loan
• Users:
– MF Unit supervisor and staff, branch manager, credit committee
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Client’s Status Report (As needed)
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READING THE REPORTS
• Check the accuracy of the figures and amounts in the reports
• Cross check figures and amounts of items between and among related reports
• Analyze the reports
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• Random check if the sub-total by account officer adds up• Check if all AO sub-totals add up with the over-all total• Check for duplicate accounts or accounts that show up
more than once. This could indicate that the account of the borrower, if fully paid, was not properly closed in the system.
• Validate whether the loan cycle or cumulative loan matches with the Client’s Status Report
• Verify whether the loan balance is correct at the time the report was generated
• Validate whether there is “lump-sum” payment schedule
Listing of Loans
ANALYZING THE REPORTS
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“Duplicate” accounts
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Loan Cycle Validation
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Check whether horizontal and vertical totals and percentages are accurate
Validate if the figures in this report, e.g. # of borrowers, loan overdue amount, outstanding balance, and PAR are consistent with the Listing of Loans report.
Using the Delinquency Report, check if the accounts with overdue amortization add up with the summary totals per age.
Analyze the extent of the delinquency After determining the extent, identify which accounts are
involved
Portfolio at Risk Report
ANALYZING THE REPORTS
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• Random check if the sub-total by account officer adds up
• Check if all AO sub-totals add up with the over-all total
• Check horizontal totals and computations e.g. exposed amount, etc…
• The Portfolio at Risk amount on this report should be equal to the Portfolio at Risk amount on the Listing of Loans and Portfolio At Risk Report
• Randomly validate the # of amortization missed and days overdue with the individual Client’s Status Report
• Using the information gathered from the PAR Report, manually age the account over 90 days
Delinquency Report
ANALYZING THE REPORTS
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Check if totals add up Check horizontal computations e.g. total revenue, and
yield%, etc… Validate whether figures in this report tally with the related
reports e.g. listing of loans and performance report by AO OLP1 ending should be equal to Total Loan Balance of
the Listing of Loans & Total Loan Account Balance of the Performance Report by AO
Total Revenue should be equal to Total Revenue of the Performance Report by AO
Total Interest Collected from MFU
1OLP – Outstanding Loan Portfolio
ANALYZING THE REPORTS
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Check if totals add up Check horizontal computations if all figures add up e.g. #
loans disbursed = # new loans disbursed + # repeat loans disbursed, etc…
Validate whether figures in this report tally with the related reports e.g. listing of loans and total interest collected by MFU Loan Account Balance should be equal to the OLP1 ending
of the Total Interest Collected & Total Loan Account balance of Listing of Loans
Total Revenue should be equal to Total Revenue of the Total Interest Collected from MFU
Performance Report by AO
1OLP – Outstanding Loan Portfolio
ANALYZING THE REPORTS
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ANALYZING THE REPORTS
Validate … # of Borrowers tally with # of accounts of the Listing of Loans # of loans w/ overdue amount tally with the number of accounts
listed on the Delinquency Report Portfolio at Risk amount tally with Total PAR amount of the
Listing of Loans PAR % tally with the Outstanding Balance % Sub-Total of the
PAR report Validate the # loan disbursed per AO by counting all accounts
released within the specified range e.g. 06/01/2004 to 06/28/2004. This can be done by manually counting the accounts released within the period in the Listing of Loans.
Performance Report by AO
1OLP – Outstanding Loan Portfolio
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Client Status Report
• Validate release and maturity dates of current loan against the Listing of Loans
• Useful when evaluating an application for a repeat loan, or when determining course of action for a delinquent borrower
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Comparison Across ReportsREPORT TITLE # Accounts O/Balance Amount
O/DuePAR PAR%
Listing of Loans
Delinquency Report
PAR Report
Interest Collected
MABS Monthly
Performance Report
PAR by Aging
PAR by Loans Disbursed
Loan Profile by Gender
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SUMMARY
In this session we learned the following:
• How to read the important MF reports • How to detect erroneous reports• How to analyze and make use of these
reports in making timely decisions.
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LINKS
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How to Verify the Accuracy of Loan Balance
• Identify the repayment frequency to determine the principal amortization
• Determine the number of “should be” payments since the first payment
• Multiply the principal amortization to the number of “should be” payments and deduct the product from the loan amount disbursed
• The difference should be equal to the listed loan balance
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Determining the Lump Sum Payments
• Identify the repayment frequency of the account• Determine the correct amortization by dividing the loan
disbursed amount with repayment frequency or installment
• Compare the result with the Amount of Amortization found in the report.
• Another way of knowing if the payment schedule is lump sum: when the amortization amount listed is either zero or equal to the loan amount granted or disbursed
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PAR Report versus Listing of Loans
PAR Report Listing of Loans
Total: Number of Borrowers Total: Number of Accounts
Total: Loan Amount Overdue Total: Amount Overdue
Total: Outstanding Balance Total: Loan Balance
Sub-Total: Outstanding Balance
Total: Portfolio at Risk
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PAR Report versus Listing of Loans
PAR Report Analysis
Outstanding Outstanding Delinquency
Balance Balance % Analysis
Current 5,700,328.34 89.51%
1 - 7 days 128,997.24 2.03% 19.31%
8 - 14 days 131,678.68 2.07% 19.71%
15 - 30 days 114,920.96 1.80% 17.20%
31 - 60 days 108,665.95 1.71% 16.27%
484,262.83 72.50%
61 - 90 days 66,302.14 1.04% 9.93%
Over 90 days 117,403.93 1.84% 17.58%
183,706.07 27.50%
Sub-Total 667,968.90 10.49%
Total 6,368,297.24 100.00%
Thank you!
