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Measuring Performance through the EAGLE Score Card

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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.

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Measuring Performance through the EAGLE Score Card

  1. 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. 2. “What  gets  measured    gets  done.”    “What  can’t  be  measured    can’t  be  managed.”    
  3. 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. 4. Indicators & WeightsEFFICIENCY (30%)ASSET QUALITY (30%)GROWTH (10%)LIABILITY STRUCTURE (10%)EARNINGS (20%)
  5. 5. EAGLE GradesExcellent  (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. 6.      Results  for  2011  (Base:  34  Banks)    
  7. 7. Annual Assessment January – December 2011•  34 banks evaluated•  2 AA; 1 EAGLE Award•  7 A•  19 B•  6 No grade
  8. 8. RESULTS  FOR    EFFICIENCY  Cost  efficiency  Loan  officer  producIvity      -­‐  Individual  loan  product      -­‐  Group  loan  product  
  9. 9. Cost Efficiency
  10. 10. Loan Officer ProductivityRange: 33 – 214Median: 86
  11. 11. Loan Officer ProductivityRange: 115 – 305Median: 260
  12. 12. RESULTS  FOR  ASSET  QUALITY   PorMolio  at  Risk  (PAR)  7  &  30   Loan  Loss  Reserve  (%  Provisioning)   Loan  Loss  Rate  (%  Write  Off)    
  13. 13. % PAR >7 daysRange: 0.28% - 52%Median: 9.3%
  14. 14. % PAR >30 daysRange: 0.21% - 47%Median: 8%
  15. 15. Loan Loss Reserve (%)
  16. 16. Loan Loss Rate (%)
  17. 17. RESULTS  FOR  GROWTH  Year  on  Year  Growth      -­‐-­‐Number  of  Borrowers      -­‐-­‐PorMolio  Amount        
  18. 18. %Growth - Number of Borrowers16 of 34 banks, or 47% had negative growth!
  19. 19. % Growth - Gross Loan PortfolioMedian: (0.59%)19 of 34 banks, or 56% had negative growth!
  20. 20. RESULTS  FOR  LIABILITY  STRUCTURE   DEPOSIT  TO  LOAN  RATIO  (%)  
  21. 21. Deposit to Loan Ratio
  22. 22. RESULTS  FOR  EARNINGS   NET  INCOME  OVER  AVG  PORTFOLIO  
  23. 23. Earnings (%)
  24. 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. 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. 26. FINDINGS  FROM  OPERATIONS  REVIEW   Check  if  your  bank  manifests   any  of  the  adverse  findings  
  27. 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. 28. !DO WELL BY DOING GOOD! ! !

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