MICROBANKING BULLETIN - Microfinance Information Exchange

BULLETIN HIGHLIGHTS AND TABLESAdditional Analysis TablesTables A and B provide data on selectedperformance indicators for groups of institutionsbased on the following five characteristics:1) Age of the MFI: Microfinance institutionsdevelop as they mature. The Bulletin classifiesMFIs into three categories (new, young, andmature) based on the difference between theyear they started their microfinance operationsand the year for which the institutions havesubmitted data.2) Scale of operation: MFIs are classified assmall, medium and large according to the sizeof their loan portfolio to facilitate comparisons ofinstitutions with similar outreach.3) Lending Methodology: Performance may varyby the methodology used by the institution todeliver loan products. The Bulletin classifiesMFIs based on the primary methodology theyused as determined by the number of loansoutstanding.4) Level of Financial Intermediation: Thisclassification is based on the ratio of totalvoluntary time and passbook deposits to totalassets. This ratio indicates the MFI’s ability tomobilize retail savings and fund its loan portfoliothrough deposits.5) Target Market: The Bulletin classifiesinstitutions into three categories—low-end,broad, and high-end—according to the range ofclients they serve based on average loanoutstanding.The quantitative criteria used to categorize thesecharacteristics are summarized in the table below.A list of institutions that fall into these categories islocated immediately following Table B.These Additional Analysis Tables provide anothermeans of creating performance benchmarksbesides the peer groups. Two of thesecharacteristics—scale of operation and targetmarket—are also factors in determining peer groupcomposition. The purpose of the AdditionalAnalysis Tables is to look at these characteristicssingularly, rather than within context of the peergroups.The inclusion of these additional tables is the resultof feedback we have received from readers ofprevious issues of the Bulletin. We would greatlyappreciate additional suggestions on how we canmake these tables more useful in the future.Age of the MFIScale of operationsLending MethodologyLevel of Retail Financial IntermediationTarget MarketNew: 1 to 2 yearsYoung: 3 to 6 yearsMature: over 6 yearsLarge: portfolio > US$ 8 millionMedium: portfolio US$ 1 to 8 millionSmall: portfolio < US$ 1 millionIndividualSolidarity Group: group of 3 to 9 borrowersVillage Banking: groups with ≥ 10 borrowersFinancial Intermediary: passbook and time deposits ≥20 percent of total assetsOther: passbook and time deposits < 20 percent of totalassetsLow-end: depth < 20% OR average loan size < US$150Broad: depth between 20% and 149%High-end: depth ≥ 150%MICROBANKING BULLETIN, SEPTEMBER 2000 47