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CASE STUDIES
PADME: An Analysis of Ten Years of Performance
L’Association pour la Promotion et l’Appui au
Développement des MicroEnterprises (PADME), a
mature microfinance institution (MFI) in its eleventh
year of operation, is among the most profitable
MFIs to participate in the MicroBanking Bulletin.
PADME was created in 1993 by the Government of
Benin with funding from the World Bank to mitigate
the adverse impact of structural adjustment on microenterprises.
PADME transformed from a program
into an independent “association” in 1999.
Since then, the MFI has attained financial selfsufficiency
and is now profitable. This case study
analyzes the institution in comparison to its African
peers, included in this edition of the MicroBanking
Bulletin, as well as its performance over time.
Margot Brandenburg
Outreach and Impact
Figure 1: PADME’s growing outreach, 1994-2003
PADME has grown significantly over the past ten
years and is now larger than the average participant
in the MicroBanking Bulletin. From December 1994
to June 2003, the institution went from serving 427
borrowers with an outstanding gross loan portfolio
of USD 257,990 to serving 26,734 borrowers with
an outstanding gross loan portfolio of USD
13,450,366. Its client base grew, on average, 66
percent per year, and the size of its gross loan portfolio,
61 percent per year. The institution’s rate of
growth has been, unsurprisingly, inversely correlated
to its size (see figure 1). PADME ended the
comparative period with a total client outreach of
25,836, just above that of its peers in Africa
(23,505).
Nb of Borrowers
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
Gross Loan Portfolio
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Number of Active Borrowers (PADME)
Number of Active Borrowers (Africa)
Gross Loan Portfolio ($) (PADME)
Gross Loan Portfolio ($) (Africa)
Source: MicroBanking Bulletin no. 10 data. PADME data shown for the period 1994-2003. Africa data shown only for 1999-2002.
Although PADME’s average outstanding loan balance
declined from USD 604 in 1994 to USD 503 in
2003, this amount did not change significantly relative
to GNP per capita, as incomes in Benin did not
fluctuate much during the ten-year period in question.
The fact that the average outstanding balance
has not changed despite rapid growth shows that
PADME is still reaching a broad target market, including
a majority of clients below the poverty line.
The MFI’s average outstanding loan balance is,
however, poised to increase in the coming months
and years, as the ceiling on individual loans will
soon increase from CFA 5,000,000 (USD 7,994) to
CFA 10,000,000 (USD 15,987). The increase will
allow the institution to continue to serve a number
of clients who now require access to larger amounts
of loan capital.
Overall Financial Performance
In the first five years of operation, PADME dipped
above and below the break-even point of operational
self-sufficiency (OSS). The year 1998 represented
a distinct turning point in its ability to generate
profit and become financially self-sufficient. It
first realized a positive adjusted return on assets
and equity that year, just as it was transforming into
an independent institution. PADME was serving
6,669 borrowers and had a gross loan portfolio of
MICROBANKING BULLETIN, MARCH 2005 13