A Window on
This presentation is the property of its rightful owner.
Sponsored Links
1 / 27

Micro-Credit Ratings International Limited 104 Qutab Plaza, DLF City-1, Gurgaon 122002 INDIA PowerPoint PPT Presentation


  • 57 Views
  • Uploaded on
  • Presentation posted in: General

A Window on Asian Microfinance. Micro-Credit Ratings International Limited 104 Qutab Plaza, DLF City-1, Gurgaon 122002 INDIA www.m-cril.com. M-CRIL in India and Asia. One of the international pioneers of the rating of microfinance institutions (MFIs).

Download Presentation

Micro-Credit Ratings International Limited 104 Qutab Plaza, DLF City-1, Gurgaon 122002 INDIA

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


A Window on

Asian Microfinance

Micro-Credit Ratings International Limited

104 Qutab Plaza, DLF City-1, Gurgaon 122002 INDIA

www.m-cril.com


M-CRIL in India and Asia

One of the international pioneers of the rating

of microfinance institutions (MFIs)

Established in 1998 has undertaken over

240 ratings of MFIs in India and Asia

Unique as an institution dedicated to the

support and facilitation of the m-f sector

Focussed its activities on India and Asia to

enable specialisation, understanding of context


M-CRIL’s achievement

Become recognised as a specialist in Asian

as well Indian microfinance

Well known throughout the region from

Kazakhstan to the Philippines

Has a team of 10 analysts with significant

experience of microfinance

Established credibility with investors – donors

and lenders


M-CRIL’s ratings outside India*

  • RatingsMFIs

  • India 200 124

  • Bangladesh 12 7

  • Nepal 4 4

  • Sri Lanka 1 1

  • Cambodia 6 4

  • East Timor 3 2

  • Indonesia 8 8

  • Myanmar 3 3

  • Philippines 4 4

  • Kazakhstan 2 1

  • _______ _______

    • 243 158

*until 15 October 2004


Ratings have enabled…

The identification of MFIs that are credit-worthy or have the potential to become sustainable in the near future

Latest rating grades of 145 MFIs

Creditworthy MFIs

Unviable MFIs


…financial flows

Substantial investment in MFIs, ~$150mn


...contributed to capacity enhancement

  • Rating reports provide

  • substantive feedback on MFI strengths and weaknesses

    in the key areas of performance assessment

    - governance

    - strategy

    - management systems

    - financial performance

    - long-term sustainability

  • comparison with key industry performance benchmarks

    on growth, outreach, portfolio quality, financial results

    and sustainability


The impact…

  • Enabling progressive and concerned MFI managements to

  • undertake substantive systemic improvements

  • concerned donors and lenders to provide capacity

    building support where necessary

M-CRIL has further contributed to this process by publishing

  • a documentation of “best practices” emerging from the

    experience of the best Indian MFI to facilitate knowledge

    and understanding of systems

  • periodic analytical reviews of sector performance – the

    M-CRIL Microfinance Review – to enable benchmarking


M-CRIL Microfinance Review 2003

  • Ratings until June 2003, 170

  • Covered 123 MFIs

  • Report uses data from 110 MFIs

  • Nearly 2.7 million clients, 1.9m in India

  • Active borrowers: 7,800 [MBB: 15,500]


Financial services

  • Mainly credit and savings, some insurance

  • 90 Indian MFIs have $52m outstanding

  • Client deposits = $32m

  • Average savings, ~$20 per client


Operating efficiency – mixed

  • Cost per borrower $12, MBB $66

  • Operating expense ratio 19.9%; typical 38% [19.1%]

  • Yields much lower; typical 18.7% [33.6%]

  • Age & model are both important


Staff productivity – reasonable

  • India average 123 clients per staff member

  • MBB 121; M-CRIL Top10 139

  • Portfolio = $8,900 per staff member

  • MBB $44,500; Top10 $16,800


Portfolio quality – needs improvement

  • PAR60 11.2%, typical 17.6%; Top10 4.2%

  • Determined by model, portfolio size

  • Grameen are more disciplined

  • More disciplined MFIs achieve scale


Client savings – major source of funds

  • Total liabilities, $83m; net worth 33%

  • Client savings account for 58% of portfolio

  • Top10 have ltd grants; >20% own funds

  • For profit structures more successful than charities


Portfolio deployment – requires focus

  • Loan portfolio = $52m, 63% of total assets

  • Investments absorb 23%

  • Efficient mixed model MFIs make best use of funds

  • Top10 have good allocation; 77% portfolio, 7% cash


Financial performance – mixed

  • Yield-APR ratio: 91% not great, but

  • RoA of –1.5% not too bad; Top10 earn 1.5%

  • SHG MFIs highly unsustainable, but

  • Large (>$0.5m) and old (>7yrs) MFIs perform better


…and efficient MFIs serve most

clients,

  • MFIs with OSS>100% serve 33% clients,

  • 50% borrowers

  • OSS>90% serve 51% clients, 70% borrowers

  • so there is positive movement…


…since the face of Indian m-f

is changing – growth


…since the face of Indian m-f

is changing – financial performance


…since the face of Indian m-f

is changing – portfolio quality


…since the face of Indian m-f

is changing- sustainability


But populist concerns about

interest rates

could derail the entire effort

to serve large numbers of low

income families…


…so consider the cost structure


…and what it implies


Conclusions

  • In order to be efficient Asian MFIs need

  • to improve

  • staff productivity/reduce operating expenses

  • MIS and tracking of overdues for better

  • portfolio quality

  • yields on portfolio

  • deployment of funds in portfolio and

  • investments


Conclusions

…but they also need a more supportive

environment

  • freedom to set interest rates in a competitive

  • not a politically constrained environment

  • an institutional/regulatory framework that

  • facilitates the collection of deposits while

  • protecting the interests of depositors –

* the creation of the microfinance company is

imperative


Thank you for your attention


  • Login