Business Planning and Financial Modeling for Microfinance Institutions: A Handbook

The new handbook provides detailed guidance on using version 3 of Microfin, the latest version of the Excel-based financial modeling tool specifically designed for MFIs.

Part 1 provides a brief overview of the key elements of strategic planning:

• Articulating the mission and goals;
• Defining markets and clients;
• Analyzing the environment;
• Performing an institutional assessment;
• Developing a strategy.

Part 2 covers the main elements of operational planning from the perspective of developing detailed financial projections.Step-by-step projections are created from case study data using the Microfin model, an Excel-based financial modeling tool developed expressly for microfinance institutions. The steps in operational planning and financial modeling include:

• Defining financial products and services;
• Specifying marketing channels;
• Planning institutional resources and capacity;
• Developing a financing strategy;
• Analyzing financial projections and indicators.

The handbook's last chapter discusses how to use the business plan and financial projections as ongoing management tools. Once readers have practiced with the Microfin model using the data provided in the case study, they can use the model to develop detailed financial projections for their own institution.

The handbook also includes several annexes with further information on the Microfin model. These explain how to install the software, present printouts from the model, list data requirements, and provide an exercise on modeling lending activity.