Main Financial Ratios in Microfinance

Course objective:

A range of ratios clearly indicates how successful a MFI is financially. Measuring and monitoring key ratios will support the management decision making that a microfinance institution needs to sustain that success as it grows.

The ratios and metrics also help indicate inefficiency in use of funds, highlight opportunities for improving services and the productivity of each member of staff. Through the course the Microfinance practitioners, officers and managers will better understand the ratios and their implication on microfinance performance and decision making

Course audience:

Management and officers of micro-finance institutions, finance managers and credit officers.

Course Contents:

1. Portfolio to Assets
2. Cost Income Ratio
3. Cost Per Active Client
4. Borrowers per Loan Officer
5. Active Clients per Staff Member
6. Client Drop Out Rate
7. Average Outstanding Loan Size
8. Average Loan Disbursed
9. Average Deposit Account Balance
10. Average Deposit Account Balance Per Depositor
11. Portfolio Yield:
12. Net Interest Margin:
13. Return on Average Assets:
14. Return on Average Equity
15. Financial Expense Ratio
16. Impairment Expense Ratio
17. Operating Expense Ratio