MIS Reports & Analysis

1. MIS Reports & Analysis Anthony P Petalcorin MABS National MIS Manager MABS Mindanao Supervisors Forum August 25, 2004

2. TOPICS • Introduction • A Refresher : Reports format and definition • Analysis on each report • Workshop

3. Introduction As part of the training and technical assistance package, MABS provides participant banks (PBs) with guidance on how to monitor the banks’ microfinance operations through a well-defined management information system (MIS).

4. Introduction Appropriate and accurate reports and indicators would greatly contribute to the participating banks’ success in microfinance and in making microfinance part of their regular operation. Sustainability can only be achieved if microfinance is well-managed and profitable. MABS has designed reports that would address this concerns

5. MABS Monitoring Reports • Listing of Loans • Collection Due Report • Delinquency Report • Portfolio at Risk Report Indicates loan portfolio data and quality • Interest Collected by MF Unit • Performance Report by AO • Microfinance Monthly Report • Client Status Report Indicates revenue, growth and performance. • PAR by Aging and Business Activity • PAR by Loans Disbursed and Business Activity • LoanProfile by Gender Analyze quality based on client, business and characteristics..

6. Listing of Loans • List of all active accounts; accounts with outstanding balance – current or overdue • Shows static information such as; borrower’s name and account number, release and maturity date, amount borrowed, outstanding loan balance, amortization due, and hold out deposits • It also shows amount overdue and portfolio at risk (PAR) amount • Report is normally generated monthly but can be generated anytime • Users: MF Unit supervisor and staff, branch manager

7. Delinquency Report1 • List of delinquent accounts; missed amortization repayment for 1 day or more • Shows static information such as; borrower’s name and account number, release and maturity date, PAR amount, total amount due • It also shows the number of amortization payments missed and how many days the borrower is overdue • This report shows the hold out balance and the exposed amount. • It as advised that the MF Unit should generate this report daily • Users: MF Unit supervisor and staff, branch manager 1Delinquency report is an exception report

8. Portfolio at Risk Report • This is a summary report showing the number of borrowers, loan amount overdue, outstanding balance or PAR amount by age. • Also shows the percentages e.g. % clients, % in arrears, and PAR % • It is advised to generate this report weekly • Users: MF Unit supervisor and staff, branch manager, top management

9. Total Interest Collected from MFU • This is a summary report showing the monthly growth of the loan portfolio (outstanding balance: beginning & ending). • Shows the interest, fees & other charges, and the total revenue collected within the period; usually monthly • Shows the yield % for the period • It is advised to generate this report monthly • Users: MF Unit supervisor and staff, branch manager, top management

10. Performance Report by Account Officers (AO) • This is a summary report showing the numbers that would determine the performance of each account officers (AO) • Shows the # of borrowers assigned to the AO, loan balance, # of accounts that are overdue, par amount and percentage • It also shows the # of new and repeat loans released during the period and the total revenue by AO • It is advised to generate this report weekly • Users: MF Unit supervisor and staff, branch manager, top management

11. Client’s Status Report • This report shows the credit history of the borrower • Shows the # of loans the borrower has already availed • Shows the repayment performance of the borrower: percentage payments made on time • Shows the detailed repayment performance of the borrowers current loan • Useful when evaluating an application for a repeat loan, or when determining course of action for a delinquent borrower • The report could be generated as needed • Users: MF Unit supervisor and staff, branch manager, credit committee

12. Other Reports • Amortization Schedule1 – use this report to validate the Client’s Status Report; amortization column on the Listing of Loans • Loan Ledger – use this report to validate the payments made by the borrower; comparing the payments listed on the Client’s Status Report 1Together with the Client’s Status Report, it is advised to include a copy of this in the loan folder.

13. ANALYZING THE REPORTS • Check the accuracy of the figures and amounts on the report • Check figures and amounts on items between related reports • Analyze the reports

14. ANALYZING THE REPORTS Listing of Loans • Random check if the sub-total by account officer adds up • Check if all AO sub-totals add up with the over-all total • Check for duplicate accounts or accounts that show up more than once. This could indicate that the account of the borrower, if fully paid, was not properly closed on the system. • Validate whether the loan cycle or cumulative loan matches with the Client’s Status Report • Verify whether the loan balance is correct at the time the report was generated • Validate whether there is “lump-sum” payment schedule

15. ANALYZING THE REPORTS Portfolio at Risk Report • Check whether horizontal and vertical totals and percentages are accurate • Validate if the figures in this report, e.g. # of borrowers, loan overdue amount, outstanding balance, and PAR are consistent with the Listing of Loans report. • Using the Delinquency Report, check if the accounts with overdue amortization add up with the summary totals per age. • Analyze the extent of the delinquency • After determining the extent, identify which accounts were involved

16. ANALYZING THE REPORTS Delinquency Report • Random check if the sub-total by account officer adds up • Check if all AO sub-totals add up with the over-all total • Check horizontal totals and computations e.g. exposed amount, etc… • The Portfolio at Risk amount on this report should be equal to the Portfolio at Risk amount on the Listing of Loans • Randomly validate the # of amortization missed and days overdue with the individual Client’s Status Report • Using the information gathered from the PAR Report, manually age the account over 90 days

17. ANALYZING THE REPORTS Total Interest Collected from MFU • Check if totals add up • Check horizontal computations e.g. total revenue, and yield%, etc… • Validate whether figures in this report tally with the related reports e.g. listing of loans and performance report by AO • OLP1 beginning should be equal to Total Loan Balance of the Listing of Loans & Total Loan Account Balance of the Performance Report by AO • Total Revenue should be equal to Total Revenue of the Performance Report by AO 1OLP – Outstanding Loan Portfolio

18. ANALYZING THE REPORTS Performance Report by AO • Check if totals add up • Check horizontal computations if all figures add up e.g. # loans disbursed = # new loans disbursed + # repeat loans disbursed, etc… • Validate whether figures in this report tally with the related reports e.g. listing of loans and total interest collected by MFU • Loan Account Balance should be equal to the OLP1 beginning of the Total Interest Collected & Total Loan Account balance of Listing of Loans • Total Revenue should be equal to Total Revenue of the Total Interest Collected from MFU 1OLP – Outstanding Loan Portfolio

19. ANALYZING THE REPORTS Performance Report by AO • Validate … • # of Borrowers tally with # of accounts of the Listing of Loans • # of loans w/ overdue amount should tally with the number of accounts listed on the Delinquency Report • Portfolio at Risk amount should tally with Total PAR amount of the Listing of Loans • PAR % should tally with the Outstanding Balance % Sub-Total of the PAR report • Validate the # loan disbursed with the Listing of Loans by counting all accounts released within the specified range e.g. 06/01/2004 to 06/28/2004. There are 2 ways to do this; at the Listing of Loan, manually count the accounts released within the period 1OLP – Outstanding Loan Portfolio

20. ANALYZING THE REPORTS Performance Report by AO Validate the # loan disbursed … • 2nd is to generate the Listing of Loans to a TXT file and convert it to MS Excel file so you can work on the data • To do this however, your banking software should be capable of generating reports to a TXT file and not limited to printing direct to the paper or to the screen. 1OLP – Outstanding Loan Portfolio

21. Summary: What have we learned so far: • That good MIS is vital in achieving a successful microfinance operations • We were able to recall the important MF reports • We were taught how to detect erroneous reports • We also learned how to analyze and utilize these reports to the fullest

23. WORKSHOP

24. Formula for YIELD % Total Revenue YIELD % = (OLP1 beginning + OLP End)/2 Total Revenue = Interest Income + Fees and Other Charges 1 Outstanding Loan Portfolio

27. “Duplicate” accounts

28. Loan Cycle Validation

29. Verify Loan Balance • Identify the repayment frequency to determine the principal amortization • Determine the number of “should be” payments since the first payment • Multiply the principal amortization to the number of “should be” payments • The result should be equal to the listed loan balance • The difference should not be higher or lower than half of the principal amortization amount

30. Determining the Lump Sum Payments • Identify the repayment frequency of the account • Determine the correct amortization schedule by dividing the loan disbursed amount with repayment frequency or installment • Compare the results with what was listed on the report. • Another way of knowing if the payment schedule is lump sum: when the amortization amount listed is either zero or equal to the loan amount granted or disbursed

31. PAR Report versus Listing of Loans

32. PAR Report versus Listing of Loans