measuring performance through the eagle score card
DESCRIPTION
MABS Microfinance Specialist, Ms. Jennifer Sabianan shares how to use the EAGLE Scorecard to measure the bank's microfinance performance during the 2012 RBAP-MABS National Roundtable Conference on June 7.TRANSCRIPT
Session 2: Measuring Performance through the
EAGLE Score Card
Jennifer S. Sabianan MABS
2012 RBAP-MABS National Roundtable Conference June 7-8, 2012
Hyatt Hotel Manila
“What gets measured gets done.” “What can’t be measured can’t be managed.”
MABS-EAGLE Assessment
• Evaluates the performance of microfinance portfolio in 5 areas, with 11 indicators
• A management tool to monitor and
evaluate factors affecting microfinance operations
Indicators & Weights
EFFICIENCY (30%) ASSET QUALITY (30%)
GROWTH (10%) LIABILITY STRUCTURE (10%) EARNINGS (20%)
EAGLE Grades
Excellent (AA): 4.25 -‐ 5 Very Good (A): 3.5 -‐ 4.24 Good (B): 2.5 -‐ 3.49
No Grade (NG): 2.49 or less
Results for 2011 (Base: 34 Banks)
Annual Assessment
• 34 banks evaluated • 2 AA; 1 EAGLE Award • 7 A • 19 B • 6 No grade
January – December 2011
RESULTS FOR EFFICIENCY Cost efficiency Loan officer producIvity -‐ Individual loan product -‐ Group loan product
Cost Efficiency
Loan Officer Productivity
Range: 33 – 214 Median: 86
Loan Officer Productivity
Range: 115 – 305 Median: 260
RESULTS FOR ASSET QUALITY PorMolio at Risk (PAR) 7 & 30 Loan Loss Reserve (% Provisioning) Loan Loss Rate (% Write Off)
% PAR >7 days
Range: 0.28% - 52% Median: 9.3%
% PAR >30 days
Range: 0.21% - 47% Median: 8%
Loan Loss Reserve (%)
Loan Loss Rate (%)
RESULTS FOR GROWTH
Year on Year Growth -‐-‐Number of Borrowers -‐-‐PorMolio Amount
%Growth - Number of Borrowers
16 of 34 banks, or 47% had negative growth!
% Growth - Gross Loan Portfolio
Median: (0.59%) 19 of 34 banks, or 56% had negative growth!
RESULTS FOR LIABILITY STRUCTURE
DEPOSIT TO LOAN RATIO (%)
Deposit to Loan Ratio
RESULTS FOR EARNINGS
NET INCOME OVER AVG PORTFOLIO
Earnings (%)
In Summary….Pay a_enIon to the following:
• Cost efficiency – Determine expenses that can be reduced – Book only MF-‐related operaIonal expenses – Increase porMolio by diversifying product – Accuracy of expense data reflected in MPM report
• Loan officer producIvity – low producIon means high cost of operaIons
• Book adequate loan loss provision following BSP Circ. 409
In Summary….Pay a_enIon to the following:
• Write off, clean out long overdue & uncollecIble accounts
• Arrest client drop outs – monitor drop outs and document reasons for leaving your bank
WHEN WAS THE LAST TIME YOU HAD A MICROFINANCE OPERATIONS REVIEW IN YOUR BANK?
FINDINGS FROM OPERATIONS REVIEW
Check if your bank manifests any of the adverse findings
• Lack of monitoring of PAR status due to non-‐ funcIoning MIS. • Loan Supervisors do not have authority to address delinquency issues (no delegaIon of authority). • Inflexible products (fixed loan amount, terms, etc.) leave clients no opIons • Poor customer service (long waiIng lines, not enough chairs, unfriendly staff) • No incenIves for borrowers who maintain high savings balance (e.g., lower interest rate, be_er payment terms, etc.)
ObservaIons on usual areas needing improvement
!DO WELL BY DOING
GOOD! !!