Assessment of Participating Banks Microfinance Performance based on MABS – EAGLE Standards
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The document discusses the EAGLE assessment, which evaluates the microfinance portfolio performance of rural banks. The assessment covers 5 areas - efficiency, asset quality, growth, liability structure, and earnings. These areas contain a total of 13 indicators that are used to measure banks' microfinance performance. The document then provides details on how each of the 5 areas is measured. It notes that 51 banks were evaluated for the period of January to December 2008, with 5 banks scoring "excellent" and qualifying for the EAGLE award, 20 scoring "very good", 18 scoring "average", and 8 not receiving a grade. Best practices and areas for improvement at the banks are also outlined.
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Assessment of Participating Banks Microfinance Performance based on MABS – EAGLE Standards
- 1. Eulogio Martin O. Masilungan Monitoring & Research Coordinator MABS 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila
- 2. “What gets measured gets done.” “What can’t be measured can’t be managed.”
- 3. • The EAGLE assessment evaluates the performance of microfinance portfolio • A management tool for monitoring and evaluating factors affecting a rural bank’s microfinance operations • Has 5 performance areas with 13 indicators
- 5. EFFICIENCY (30%) • Cost Efficiency • Loan Officer Productivity (group and individual loan) • Cost per Active Borrower (group and individual loan)
- 6. ASSET QUALITY (30%) • PAR Over 7 Days • PAR Over 30 Days • Loan Loss Provision • Loan Loss Rate
- 7. GROWTH IN PORTFOLIO (10%) • Growth in Active Borrowers • Growth in Loan Portfolio LIABILITY STRUCTURE (10%) • Deposit to Loan Ratio EARNINGS (20%)
- 8. AA: Overall weighted score of 4.25 and above - Excellent microenterprise finance performance A: Overall weighted score between 4.24 and 3.5 – Very good microenterprise finance performance B: Overall weighted score between 2.5 and 3.49 – Average microenterprise finance performance NG: Overall weighted score less than 2.49 – Below average performance
- 9. So, how did banks score for the period January to December 2008?
- 10. • 51 banks were evaluated • 5 scored AA; 3 are qualified for the EAGLE Award • 20 scored A • 18 scored B • 8 No grade
- 22. Measuring GROWTH
- 29. BEST PRACTICES
- 30. Best Practices • Allot a day a week for promotional activities such as barang ay visits, distribution of flyers and community events • Ask AOs to work on Saturdays if there are PAR problems and low intake of new clients • Ask AOs to prepare weekly prospects list • Niche marketing – TODA members
- 32. Areas for Improvement • Non-functioning MIS resulted in non monitoring of PAR status • Loan Supervisors are not given authority to address delinquency issues (no delegation of authority) • nflexible products (fixes loan amount, I terms, etc.) • Poor customer service (long waiting lines, not enough chairs, unfriendly staff)
- 33. Areas for Improvement • No incentives for MF borrowers who maintain high savings balance (e.g., lower interest rate, better payment terms, etc.)
- 34. Continue ! Doing Well by Doing Good ! and ! See You All at the ! MABS EAGLE Awards ! tonight!!