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.

1. 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

2. “What
gets
measured
gets
done.”
“What
can’t
be
measured
can’t
be
managed.”

3. 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

4. Indicators & Weights
EFFICIENCY (30%)
ASSET QUALITY (30%)
GROWTH (10%)
LIABILITY STRUCTURE (10%)
EARNINGS (20%)

5. 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

6.
Results
for
2011
(Base:
34
Banks)

7. Annual Assessment
January – December 2011
• 34 banks evaluated
• 2 AA; 1 EAGLE Award
• 7 A
• 19 B
• 6 No grade

8. RESULTS
FOR
EFFICIENCY
Cost
efficiency
Loan
officer
producIvity
-­‐
Individual
loan
product
-­‐
Group
loan
product

9. Cost Efficiency

10. Loan Officer Productivity
Range: 33 – 214
Median: 86

11. Loan Officer Productivity
Range: 115 – 305
Median: 260

12. RESULTS
FOR
ASSET
QUALITY
PorMolio
at
Risk
(PAR)
7
&
30
Loan
Loss
Reserve
(%
Provisioning)
Loan
Loss
Rate
(%
Write
Off)

13. % PAR >7 days
Range: 0.28% - 52%
Median: 9.3%

14. % PAR >30 days
Range: 0.21% - 47%
Median: 8%

15. Loan Loss Reserve (%)

16. Loan Loss Rate (%)

17. RESULTS
FOR
GROWTH
Year
on
Year
Growth
-­‐-­‐Number
of
Borrowers
-­‐-­‐PorMolio
Amount

18. %Growth - Number of Borrowers
16 of 34 banks, or 47% had negative growth!

19. % Growth - Gross Loan Portfolio
Median: (0.59%)
19 of 34 banks, or 56% had negative growth!

20. RESULTS
FOR
LIABILITY
STRUCTURE
DEPOSIT
TO
LOAN
RATIO
(%)

21. Deposit to Loan Ratio

22. RESULTS
FOR
EARNINGS
NET
INCOME
OVER
AVG
PORTFOLIO

23. Earnings (%)

24. 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

25. 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?

26. FINDINGS
FROM
OPERATIONS
REVIEW
Check
if
your
bank
manifests
any
of
the
adverse
findings

27. ObservaIons
on
usual
areas
needing
improvement
•
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.)

28. !
DO WELL BY DOING
GOOD!
!
!