Measuring results of microfinance institutions : minimum indicators that donors and investors should track - a technical guide
Rosenberg, Richard;
Funding agencies' microfinance interventions produce better results when design, reporting, and monitoring focus explicitly on key measures of performance that are measured and reported regularly. The more transparent the results, the more likely funders are to learn from successes and failures, and to take corrective actions when needed. Unfortunately, many projects that support retail microfinance providers fail to include such measurement. This is especially true of programs that channel support indirectly (through networks or wholesale 'apex' facilities, for example) and credit components of non-financial programs (such as revolving funds lodged in social projects). This technical guide is written for funding agency staff who design or monitor projects that finance microfinance institutions (MFIs) or community-managed loan funds (CMLFs). This guide offers basic tools to measure performance in a few critical areas: 1) breadth of outreach, how many clients are being served? 2) Depth of outreach, how poor are the clients? 3) Loan repayment (portfolio quality), how well is the lender collecting its loans? 4) Financial sustainability (profitability), is the MFI profitable enough to maintain and expand its services without continued injections of subsidies? 5) Efficiency, how well does the MFI control its operating costs? This list has been kept short, and the treatment of indicators as basic as possible, to make this guide useful for non-specialists.
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