Performance Evaluation of MFIs

This presentation provides details of a training session on performance evaluation of microfinance institutions (MFIs)It states that performance evaluation:

• Is an analysis based on standard indicators to assess the level of performance and risk of a microfinance institution;
• Can help a donor or a supporting NGO to better know the performance/level of sustainability of its partner;
• Can help investors identify potential investments and follow-up the MFIs that they are investing in.

The presentation includes discussions on:

• Gross loan portfolio;
• Portfolio quality;
• Portfolio at risk;
• Risk coverage ratio.

It concludes that:

• Profitability is required to achieve growth (outreach), and enables innovation and access to new sources of funding;
• Portfolio quality and efficiency are the basis for sustainability;
• These ratios are part of the decision making process.