session 3 assmt building blocks mf 2011 05-17
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This is the Session 3 ASSIGNMENT power point. Please check this and send me any corrections by Thur 19 May 9 pm. Thanks, PhyllisTRANSCRIPT
13/04/23 Practical Microfinance Session 3/7: MF Building Blocks 1
Building Blocks of MFI
Practical Microfinance Course, Session 3 Microfinance
Assignment
Sadrudin Akbarali, FCA
Session 3 Assignment: Building Blocks for starting a basic microfinance programme
Research Mission Planning Design Implementation EvaluationYour course assignment: Choose a MFI to study and compare with another, make recommendations
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From Session 1: What is Microfinance?
•65%+ in Less Developed Countries (LDC) are Unbanked, most of them are Poor or Ultra Poor• The Poor
•Bankable, often with 98% repayment rates•Lack collateral or records•Want savings facility
• Almost all MFIs apply Group Lending • Access is more important than price of loansThey do not mind paying higher interest rate than Commercial Banks, so long as it below local money lenders’ rates.
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THINK of the Country/RegionTHINK of the Country/Region
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1. Environment Scanning Research 1. Environment Scanning Research
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Before preparing your proposalBefore preparing your proposal
List 7 KEY information points List at least 5 sources of information
1. 1.
2. 2.
3. 3.
4. 4.
5. 5.
6.
7.
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3. Market research
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4. Design of Products & Methodology4. Design of Products & Methodology
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• Loan of $100; Flat rate interest Charged 20%. Repayable over 12 months by monthly instalments.
• Total Payable = $120• Monthly Instalment = $10. • Principle=? • Effective Interest Rate?
TEST 2 from session 3TEST 2 from session 3
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5. Demand & Marketing Plan5. Demand & Marketing Plan
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LOAN PORTFOLIO (EXCEL FILE 1)LOAN PORTFOLIO (EXCEL FILE 1)
ASSUMPTIONSYear 1
$Year 2
$Year 3
$Year 4
$Year 5
$
Monthly Interest rate 2% 2% 2% 2% 2%
Loan Arrangement fee 1% 1% 1% 1% 1%
Average Duration-mnths 12 12 12 12 12
# of officers (Per Staff Workplan) 4 8 16 20 24
Average size of New Loans 200 220 242 266 293
Average size of Repeat Loans - 248 300 357 420
# of New Loans Disbursed 720 1,440 2,880 3,600 4,320
# of Repeat Loans disbursed - 432 1,296 3,024 5,184
Movement of Loan Portfolio
Prev Yr Loans b/f 84,672 215,956 553,582 981,674
Disbursements during year
- Value of New Loans Disbursed 144,000 316,800 696,960 958,320 1,264,982
-Value of Repeat LDs - 106,920 388,476 1,080,248 2,179,600
Total Value of LDs in current yr 144,000 423,720 1,085,436 2,038,568 3,444,582
Gross Value of Loans 144,000 508,392 1,301,392 2,592,150 4,426,256
Repayments
- Prev Yr Loans Repaid 84,672 215,956 553,582 981,674
- New & Repeat Loans= 2/5 * LDs 57,600 203,357 520,557 1,036,860 1,770,503
(repts applied 40% instead of 45%)
Total Repayments 57,600 288,029 736,513 1,590,442 2,752,177
Current yr Loan Outstanding 86,400 220,363 564,879 1,001,708 1,674,080
Loans written-off-2% 1,728 4,407 11,298 20,034 33,482
Net Loans Outstanding 84,672 215,956 553,582 981,674 1,640,598
Loss Reserve 2% 1,693 4,319 11,072 19,633 32,812
Average Loan Outstanding 42,336 150,314 384,769 767,628 1,311,136
CASE LOAD
No of Active Loans per officer 103 133 149 189 226
Value of Active Loans per officer 10,584 18,789 24,048 38,381 54,631
Loan Volume & Portfolio Movement
Movement of Loans-Volume
# of New Loans Disbursed 720 1,440 2,880 3,600 4,320
# of Repeat Loans disbursed - 432 1,296 3,024 5,184
Total 720 1,872 4,176 6,624 9,504
Repyments:
New & Repeat Loans= 2/5 * LDs 288 749 1,670 2,650 3,802
Total Repayments 288 749 1,670 2,650 3,802
Current yr Loan Outstanding 432 1,123 2,506 3,974 5,702
Loans written-off-5% 22 56 125 199 285
Net Loans Outstanding 410 1,067 2,380 3,776 5,417
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6. Organisation6. Organisation
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Organisation chart & Governance
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7. Implementation and Work Plan
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8. Financial Planning & Budget
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9. Investment & Funding
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10. Evaluation with regularity10. Evaluation with regularity
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11. Monitoring & impact11. Monitoring & impact
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ConclusionConclusion
• Review all the components above• Be very clear about funding & financial plan• Prepare one page Executive Summary &
incorporate it into the entire proposal• Make a presentation to the Stakeholders• Consider evolution of the credit company to a
fully fledged Microfinance BankGOOD LUCK
• Review all the components above• Be very clear about funding & financial plan• Prepare one page Executive Summary &
incorporate it into the entire proposal• Make a presentation to the Stakeholders• Consider evolution of the credit company to a
fully fledged Microfinance BankGOOD LUCK
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Session 3: assignmentPreparation for Session 4 and Your MFI case studyRural Finance on-line Lesson 7. Understanding the
accounts of financial service providershttp://www.microfinancelessons.com/about/lesson7.html
Read Power Point handout: Session 3 Assignment: Building Blocks for MF
Pair up with a ‘buddy’ to work on your microfinance case study
Course assignment: step 1Choose a country, region or city you want to
research for a microfinance project. You will produce a report to present to the group in
Session 7
Summary Session 3: Measuring Performance • Research• Mission• Planning• Design• Implementation• EvaluationCase study: Eastern Tajikistan, 1996-2010
Read about Eastern Tajikistan on the BBC web-link: http://news.bbc.co.uk/1/hi/world/asia-pacific/1484945.stm
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