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SEEP FRAME tool.XLS 3
 

SEEP FRAME tool.XLS 3

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  • Presenter’s notes Time: 0 minutes
  • Presenter’s Notes Time: 0.25 minutes - Give brief overview of the topics you will cover during this presentation
  • Presenter’s Notes Time: 1 minute If this presentation is given following the presentation of the FRAMEWORK document then you can skip this slide and just mention briefly that this tool is being developed as a result of the FRAMEWORK document. If the presentation is given in isolation of the FRAMEWORK document presentation, then you may want to give a little bit of the history of the FRAMEWORK document: History: 1995: “Financial Ratio Analysis of Microfinance Institutions” 2002: “Microfinance Financial Definitions Guidelines: Definitions of Selected Financial terms, Ratios and Adjustments for Microfinance” 2004: Development of “Measuring Performance of Microfinance Institutions: A Framework for Reporting, Analysis, and Monitoring” (the “Framework”). Early 1990’s: standards began to emerge for stronger financial management and especially management and reporting of delinquency 1995 paper also called “Blue Book” or “Ratios Monograph”. Contributed greatly to the development and adoption of financial reporting standards in microfinance. Why was “Financial Definitions Guidelines” document developed? Many terms continued to differ in name and content among MFIs, leading to confusion and distortions when comparing MFIs. Thus, this document defined nearly 50 financial terms and provided calculation guidelines for 20 ratios. Why was this Framework developed? Several terms were not included in definitions document Framework goes beyond definitions to include sample financial statements and report templates, suggest calculations for adjustments and make recommendations on which indicators to monitor.
  • Presenter’s Notes Time: 0.5 minutes - When talking about training on the SEEP FRAMEWORK, mention that the objective is to promote the use of industry-accepted financial terms and calculations for ratios and adjustments
  • Presenter’s Notes Time: 1 minute Briefly review the structure of the tool, indicating that grey boxes represent “input sheets” and blue boxes represent “Result sheets”
  • Presenter’s Notes Time: 1 minute Highlight that the tool holds data for up to two historical years and the current year. Point out that these user choices enable use of the tool in as BASIC or as ADVANCED mode, depending on the user’s experience, availability of data, etc.
  • Presenter’s Notes Time: 0.25 minute Briefly mention that if the user does not enable advanced features, the tool can be used like in BASIC mode, where several sheets will be hidden, compared to slide 5.
  • Presenter’s Notes: Time: 2 minutes - Input sections match the Framework formats exactly For the third bullet, give example; post on a flip-chart if possible: For example, if the user selected in the set up sheet: Current Year: 2005 First month of FY: 4 Data Entry for Year 1: Don’t enter data Data Entry for Year 2: Quarterly Data Entry for Current Year: Monthly Then in the data input sheet he/she will need to enter quarterly YTD data for 2004 and monthly YTD data for 2005, starting in June of 2004 because the FY begins in April and the choice was quarterly data for year 2. The user won’t enter data for 2003; yr 1 columns will be automatically hidden. The data input sheet will show 4 columns for 2004 and 12 columns for 2005. YTD data means that if FY begins in April, for June 2004, the user must enter data for April, May and June in the Income Statement. For September 2004, the user must enter data from April to September.
  • Presenter’s Notes Time: 1 minute - Information is necessary to calculate variance columns in the Financial reports that come later - Sheet will include all user-defined sub-accounts identified earlier by the user.
  • Presenter’s Notes Time: 1 minute - This sheet shows ALL of the data entered as opposed to showing user-selected periods of data (this will be possible in the financial reports sheet that comes later).
  • Presenter’s Notes Time: 1 minute - Explain that user can toggle back and forth between the two methods to see the results of adjusting with each method but that for purposes of reporting, the user has to select one method or the other. - If the user selects “True Performance” adjustments, then all the rows for “Benchmarking adjustments” are automatically hidden.
  • Presenter’s Notes Time: 0.5 minute This slide is self-explanatory
  • Presenter’s Notes Time: 1 minute - Format of the Reports will be identical to those in the Framework document
  • Presenter’s Notes Time: 0.5 minutes Adjusted financial statements follow the format in the SEEP Framework document
  • Presenter’s Notes Time: 0.5 minutes Mention that most of the ratios can be calculated, on an unadusted and adjusted basis Even if the user does not input data necessary to calculate adjustments in the previous sheets, he/she can still calculate ratios in an unadjusted way.
  • Presenter’s Notes Time: 0.5 minute - The reports will be in the format of the SEEP Framework reports Reports will draw information from the FORECAST sheet to calculate variances, where applicable Reports will optionally display the user-defined sub-accounts.
  • Presenter’s Notes Time: 1 minute - Mention that the user-defined data points/indicators can be incorporated into the monitoring reports
  • Presenter’s Notes Time: 1 minute Example of warnings: when balance sheets do not balance, or when cross-referenced accounts do not equal Export function will allow user to transfer information to other databases or spreadsheets
  • Presenter’s Notes Time: 1 minute This slide is self-explanatory
  • Presenter’s notes IF TIME ALLOWS, TAKE QUESTIONS FROM THE AUDIENCE.

SEEP FRAME tool.XLS 3 SEEP FRAME tool.XLS 3 Presentation Transcript

  •  
  • SEEP FRAME tool.XLS
  • Overview of SEEP FRAME Tool
    • Background
    • Purpose
    • Structure
    • Roll-out Plan
  • Background
    • In 2004, SEEP completed the final draft of “Measuring Performance of Microfinance Institutions: A Framework for Reporting, Analysis, and Monitoring”
    • The framework consists of 5 chapters:
      • Chapter 1: Introduction of the Framework concept, purpose, history and future
      • Chapter 2: Financial Statements and Reports
      • Chapter 3: Analytical Adjustments
      • Chapter 4: Financial Ratios and Indicators
      • Chapter 5: Creating and Analyzing Performance Monitoring Reports
    • In 2005, SEEP and CRS contracted the developers of Microfin to design a tool for the Framework
  • Purpose
    • To provide a spreadsheet tool that follows the format of the SEEP Framework document
    • The tool is designed to:
      • Facilitate training on the SEEP Framework
      • Offer a simple financial performance monitoring tool that will satisfy an MFI Manager’s basic financial performance monitoring needs
      • Be a user-friendly tool that can maintain and export data.
  • FRAME Tool Structure
    • EXCEL Workbook Sheets:
    User Set-up Data Input Forecast Data Input Monthly Data – Unadjusted Adjustments Input Monthly Data- Adjusted Fin. Reports – Unadjusted Fin. Reports – Adjusted Ratios – SEEP 18
    • Reports
    • Management
    • Board
    • Donor
    • Investor
    User-sheets Input sheets Result sheets
  • FRAME Tool Structure User Set-up
    • User enters general information (e.g. name of the institution)
    • User makes the following choices
      • Monthly/Quarterly/Annual/No input for each of three years of data
      • Enable direct or indirect cash flow?
      • Enable Adjustments?
      • Enable CRS gender ratios?
      • Enable Forecast sheet and Variance analysis?
      • Enable user-defined sub-accounts?
      • Enable BASIC set of ratios or ALL ratios?
  • FRAME Tool Structure
    • If user does not enable advanced features, EXCEL Workbook Sheets :
    User Set-up Data Input Monthly Data – Unadjusted Fin. Reports – Unadjusted Ratios – SEEP 18
    • Reports
    • Management
    • Board
    • Donor
    • Investor
    Input sheets Result sheets
  • FRAME Tool Structure
    • User enters the information required for each of the Financial Statements and Reports:
      • Income Statement
      • Balance Sheet
      • Cash Flow Statement
        • Direct or Indirect depending on user-choice
      • Portfolio Report
      • Non-Financial Data Report
    • User must:
      • Input data for the periods selected in the “Set-up” sheet
      • Input “Initial Balances” for certain line items so that the tool is able to calculate averages needed for ratios
      • Input YTD data
    Data Input
  • FRAME Tool Structure
    • Sheet is optional depending on the user’s choice in the set-up sheet
    • User will be asked to input: Monthly/quarterly/annual projected amounts for all Income Statement categories, key Balance Sheet categories, and Activity Indicators.
    Forecast Data Input
  • FRAME Tool Structure Monthly Data – Unadjusted
    • Sheet shows the same information as the “Data Input” sheet, but nicely formatted and in Read-only form
    • Can be printed for the user to verify that the information was entered correctly
    • Can be used for trend analysis
  • FRAME Tool Structure Adjustments Input
    • User selects adjustment method:
      • True performance
      • Benchmarking
    • User enters assumptions and inputs for the three types Adjustments:
      • Subsidy adjustments
      • Inflation adjustment
      • Portfolio at risk adjustments
    • Sheet calculates the adjustment values for each period and summarizes the adjustments in a summary section at the top.
  • FRAME Tool Structure Monthly Data- Adjusted
    • Sheet is identical to the “Monthly Data – Unadjusted” but there are additional rows showing the adjustments where they apply
    • Only shows those Statements and Reports that are affected by the Adjustments:
      • Income Statement
      • Balance Sheet
      • Portfolio Report
  • FRAME Tool Structure Fin. Reports – Unadjusted
    • Tool contains a FINANCIAL REPORTS GENERATOR sheet for:
      • Income Statement
      • Balance Sheet
      • Cash Flow
      • Portfolio Report
    • Allows for 2 or 3 periods of comparative data
    • Will contain information from the beginning of the FY to a user-specified ending date during that FY.
    • Option to create these reports in either local or external currency.
  • FRAME Tool Structure Fin. Reports – Adjusted
    • Sheet will show Adjusted Financial Statements
    • User will be able to select cut-off dates for the Adjusted Financial Statements.
  • FRAME Tool Structure Ratios – SEEP 18
    • Definitions and formulas for the 18 ratios recommended by the SEEP Framework
    • Will calculate and display the ratios for all of the periods for which the user entered data.
  • FRAME Tool Structure
    • Reports
    • Management
    • Board
    • Donor
    • Investor
    • User will be able to create the following reports:
      • Monthly Management Report
      • Quarterly Management Report
      • Quarterly Board Report
  • FRAME Tool Structure User-sheets
    • Unlimited number of user sheets, on demand, at the end of the workbook
    • Other user-defined features include:
      • Sub-accounts
      • Ability to add up to 50 data points/indicators outside of the SEEP Framework (e.g. social indicators).
  • FRAME Tool: Additional Features
    • Warnings when the user enters incorrect data
    • Export function
    • Multi-language (English, Spanish, French, User-defined)
    • Provided on a CD
  • FRAME Tool: Roll-out Plan
    • April-May 2005: Develop Pilot Tool
    • June-August 2005: Pilot testing in 3 training courses
    • September 2005: Incorporate feedback from pilot testing; translate
    • October 2005 – Launch final tool
    • Questions ?