Performance Indicators Report 2005

This report aims to achieve one of the primary objectives of the Pakistan Microfinance Network (PMN), which is to establish performance measures and benchmarks and use them to promote financial transparency in retail MFIs.

The report presents:

• Overview of the PMN - its background, mission, objectives, and rationale;
• Changes and improvements since the last report and future plans of the PMN;
• Rationale behind the adjustments that the PMN makes to the financial data, which includes:
  • To give an institution a more accurate picture of its financial position;
  • To make data form various MFIs comparable;
  • To make adjustments for inflation, subsidies, cost-of-funds, etc.;
• The rationale behind, and a list of 'peer grouping' of MFIs based on their uniqueness that separates them from other MFIs and makes them similar in the way they function.

The report also discusses:

• Financial trends in the Pakistan microfinance sector;
• The definitions and considerations of various performance indicators. These include:
  • Institutional characteristics, financing structure, outreach indicators, overall financial performance, operating income, operating expenses, efficiency and productivity indicators, risk and liquidity indicators.

The report then presents a review of the financial performance of various members of the PMN, such as:

• The Bank of Khyber;
• Orix Leasing, Pakistan;
• The First Microfinance Bank Ltd.

It concludes with findings about and recommendations for each of these institutions.