Healthy microfinance sectors rely on strong retail institutions. Effective performance monitoring and benchmarking (PMB) systems provide a powerful tool to all actors engaged with MFIs to assess and reinforce institutional strength. For managers and board members, such systems provide sign posts for identifying institutional strengths and weaknesses, understanding performance within a rapidly evolving industry, and creating realistic targets for institutional growth. Before making investments, donors and investors use performance data to identify promising institutions, assess risks and set investment targets.
Once investments are made, they require PMB systems to track their portfolios. Regulators, networks and other market facilitators rely on these data to track the health of the sector, promote industry development, and, where applicable, measure compliance with local regulation. This course takes participants through the processes and systems involved in performance monitoring and benchmarking.
From this process perspective, participants will review concepts from industry reporting standards and apply them at each stage in the process, from information collection to performance analysis. With a focus on building scalable performance monitoring systems, this course focuses on core industry business reporting, including key outreach and financial performance indicators, used in quantitative MFI analysis.
In this course, participants will:
Prerequisites:
This course will assume that participants are familiar with financial analysis and its application to microfinance institutions through either experience or study.
Audiences:
Benchmarking MFI Performance targets actors who wish to monitor or review the performance of a portfolio of MFIs, whether for investment, technical support, regulatory or other purposes. While primarily designed to meet the needs of these second tier actors, past MFI participants have found this course useful in helping them understand how to benchmark their own institution’s performance.
Participants will progress day-by-day through the various steps necessary to building a performance monitoring and benchmarking system:
Collection:
Reliable, timely, meaningful data are the prime inputs into performance analysis. Participants will review their own performance monitoring needs before considering key question of data availability, potential sources of information and relative reliability.
Preparation:
While data are the inputs, processes and systems for performance monitoring are what transform the raw material into useful information. Participants will practice applying industry reporting standards (terms, adjustments, indicators) to data from real MFIs, discuss their limitations and the importance of building widespread acceptance of them.
Analysis:
Drawing on large pools of reliable market data on MFI performance, analysts can identify MFI strengths and weaknesses, inform investment decisions, survey a market, and set future performance targets. Participants will review benchmarking and comparative analysis before undertaking their own MFI performance assessments.
