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Session 2 : Measuring Performance through the EAGLE Score Card

The EAGLE Scorecard is a robust management tool designed to evaluate the performance of microfinance portfolios. It assesses five key areas with eleven specific indicators to monitor and enhance operations effectively. By focusing on efficiency, asset quality, growth, liability structure, and earnings, organizations can gain valuable insights for improving outcomes. The assessment provides grades for performance and identifies critical focus areas to optimize management strategies. Discover how proper monitoring can drive success in microfinance operations.

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Session 2 : Measuring Performance through the EAGLE Score Card

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  1. Session 2:Measuring Performance through the EAGLE Score Card Jennifer S. Sabianan MABS 2012 RBAP-MABS National Roundtable Conference June 7-8, 2012 Hyatt Hotel Manila

  2. Managing for Success “What gets measured gets done.” “What can’t be measured can’t be managed.”

  3. MABS-EAGLE Assessment • Evaluates the performance of microfinance portfolio in 5 areas, with 11 indicators • A management tool to monitor and evaluate factors affecting microfinance operations

  4. Indicators & Weights EFFICIENCY (30%) ASSET QUALITY (30%) GROWTH (10%) LIABILITY STRUCTURE (10%) EARNINGS (20%)

  5. EAGLE Grades Excellent (AA): 4.25- 5 Very Good (A): 3.5 -4.24 Good (B): 2.5 - 3.49 No Grade (NG): 2.49 or less

  6. Results for 2011 (Base: 34 Banks)

  7. Annual Assessment January – December 2011 • 34banks evaluated • 2AA; 1EAGLE Award • 7 A • 19 B • 6 No grade

  8. Cost efficiency Loan officer productivity - Individual loan product - Group loan product RESULTS FOR EFFICIENCY

  9. Cost Efficiency

  10. Loan Officer Productivity Range: 33 – 214 Median: 86

  11. Loan Officer Productivity Range: 115 – 305 Median: 260

  12. Portfolio at Risk (PAR) 7 & 30 Loan Loss Reserve (% Provisioning) Loan Loss Rate (% Write Off) RESULTS FORASSET QUALITY

  13. % PAR >7 days Range: 0.28% - 52% Median: 9.3%

  14. % PAR >30 days Range: 0.21% - 47% Median: 8%

  15. Loan Loss Reserve (%)

  16. Loan Loss Rate (%)

  17. Year on Year Growth --Number of Borrowers --Portfolio Amount RESULTS FORGROWTH

  18. %Growth - Number of Borrowers 16 of 34 banks, or 47% had negative growth!

  19. % Growth - Gross Loan Portfolio Median: (0.59%) 19 of 34 banks, or 56% had negative growth!

  20. DEPOSIT TO LOAN RATIO (%) RESULTS FORLIABILITY STRUCTURE

  21. Deposit to Loan Ratio

  22. NET INCOME OVER AVG PORTFOLIO RESULTS FOR EARNINGS

  23. Earnings (%)

  24. In Summary….Pay attention to the following: • Cost efficiency • Determine expenses that can be reduced • Book only MF-related operational expenses • Increase portfolio by diversifying product • Accuracy of expense data reflected in MPM report • Loan officer productivity – low production means high cost of operations • Book adequate loan loss provision following BSP Circ. 409

  25. In Summary….Pay attention to the following: • Write off, clean out long overdue & uncollectible accounts • Arrest client drop outs – monitor drop outs and document reasons for leaving your bank WHEN WAS THE LAST TIME YOU HAD A MICROFINANCE OPERATIONS REVIEW IN YOUR BANK?

  26. Check if your bank manifests any of the adverse findings FINDINGS FROM OPERATIONS REVIEW

  27. Observations on usual areas needing improvement • Lack of monitoring of PAR status due to non- functioning MIS. • Loan Supervisors do not have authority to address delinquency issues (no delegation of authority). • Inflexible products (fixed loan amount, terms, etc.) leave clients no options • Poor customer service (long waiting lines, not enough chairs, unfriendly staff) • No incentives for borrowers who maintain high savings balance (e.g., lower interest rate, better payment terms, etc.)

  28. DO WELL BY DOING GOOD!

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