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  

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

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

Indicators & Weights

EFFICIENCY (30%) ASSET QUALITY (30%)

GROWTH (10%) LIABILITY STRUCTURE (10%) EARNINGS (20%)

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    

     

     Results  for  2011  (Base:  34  Banks)    

Annual Assessment

• 34 banks evaluated •  2 AA; 1 EAGLE Award •  7 A • 19 B •  6 No grade

January – December 2011

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

Cost Efficiency

Loan Officer Productivity

Range: 33 – 214 Median: 86

Loan Officer Productivity

Range: 115 – 305 Median: 260

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

% PAR >7 days

Range: 0.28% - 52% Median: 9.3%

% PAR >30 days

Range: 0.21% - 47% Median: 8%

Loan Loss Reserve (%)

Loan Loss Rate (%)

RESULTS  FOR  GROWTH  

Year  on  Year  Growth      -­‐-­‐Number  of  Borrowers      -­‐-­‐PorMolio  Amount        

%Growth - Number of Borrowers

16 of 34 banks, or 47% had negative growth!

% Growth - Gross Loan Portfolio

Median: (0.59%) 19 of 34 banks, or 56% had negative growth!

RESULTS  FOR  LIABILITY  STRUCTURE  

DEPOSIT  TO  LOAN  RATIO  (%)  

Deposit to Loan Ratio

RESULTS  FOR  EARNINGS  

NET  INCOME  OVER  AVG  PORTFOLIO  

Earnings (%)

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  

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?  

FINDINGS  FROM  OPERATIONS  REVIEW  

Check  if  your  bank  manifests  any  of  the  adverse  findings  

 •    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.)  

ObservaIons  on  usual  areas  needing  improvement  

!DO WELL BY DOING

GOOD! !!