May 12, 2009Liz Larson, MABS Roundtable, Manila, Philippines

MIX and the value of Customized Performance Reporting (CPR)

What is the MIX?

To support the growth of the microfinance industry through a world-class public information platform

OUR MISSION:

Limited ability for MFIs and banks to benchmark performance for management diagnostic and business planning

New capital cannot connect with second tier MFIs Policy makers have limited picture of areas requiring support

… because … Lack of consistent, reliable data in public domain Private data costly to aggregate on representative scale and

coverage for any single actor

Lack of transparency

stymies industry growth

The Problem: Overcoming data dearth

MIX delivers

The authoritative voice on definitions and selection of core indicators for microfinance data analysis

The leader in fundamental MFI data for banks and other institutions

An independent source – no other business interest

The researcher’s choice for MFI performance benchmarks and global, regional analysis including banks with microfinance operations

Standards

Data

Analysis

Through Company data – on MFIs, Banks & Investors MFI performance data – individual and in aggregate

Training – financial & operational reporting Leadership – performance standards

Products: MicroBanking Bulletin

MicroBanking Bulletin is a global leading publication

on the sectorExpert author contributions on

latest industry topics

Industry leading annual / time series MFI performance

benchmarks and analysis

Products: Customized MFI performance reports, CPRs

Performance reports for MFIs, covering:

Analysis of trends in performance

Comparison to peer institution benchmarks

Diagnostic tools for:Managers

Board

Stakeholders

Products: MIX Market

Public profiles:1,400 MFIs

103 Investors / Donors

184 Market Facilitators

Information:General information and contacts

Outreach

Financial Performance

Audits / Ratings

Tools:Comparative Analysis

Trend Analysis

Heat Map

Asia Coverage: MIX Market Growth

2000 2001 2002 2003 2004 2005 2006 2007

Products: Regional/Country analysis Annual surveys of

microfinance performance in a region or country,

including:Performance analysis

Sector development

Local performance benchmarks

Some latest reports: including Asia 2008 report, Global 100

Benchmarking Report, MCPI report

Written, published and disseminated with local

partners

Working with PartnersMIX Partners (examples):

Latin America• ProDesarrollo

• REDCAMIF (C. America)• COPEME (Peru)

• RFR (Ecuador)• ASOFIN (Bolivia)

Africa• Ghamfin (Ghana)• AEMFI (Ethiopia)

Arab States• Sanabel

E. Europe / C. Asia• RMC (Russia)

• AMFA (Azerbaijan)

Asia• PMN (Pakistan)

• M-Cril (India)

• RBAP (Philippines)• MCPI (Philippines)

• MICRA (East Asia)

How can you use this information?

Understand sector trends

Set the context for rural banks

Compare your rural bank

Asia Trends: Growth

Cambodia and Philippines lead portfolio growth in East Asia, with borrowers growing by 32% and 36%.

Asia Trends: Funding Patterns

  Country Equity Liabilities

Higher Growth in Debt

Afghanistan 20% 84%

Bangladesh 21% 48%

Cambodia 18% 130%

Nepal 11% 31%

Pakistan 5% 36%

Vietnam 66% 82%

Higher Growth in Equity India 216% 91%

Equal growth in Debt / Equity

Indonesia 25% 27%

Philippines 77% 72%

Sri Lanka 20% 28%

As leverage increases in Asian microfinance, countries with savings based funding (incl. Philippines) keep stable funding structure.

Asia Trends: Returns

Asia returns are stable, with slight increase in returns on equity from higher leverage. Returns on equity in the Philippines are increasing especially in 2007.

Asia Trends: Efficiency

Asian efficiency remains stable, with biggest gains in developing Afghan sector. Indian subcontinent leads through group lending but Philippines is improving.

How can you use this information?

Understand sector trends

Set the context for rural banks

Compare your rural bank

Rural Banks: Size

Philippine rural banks are much larger than regional peers with the greatest number of depositors and borrowers.

Rural Banks: Deposit funding

Rural banks have same leverage as peers, with Philippine Rural Banks having the highest deposit to loan ratio.

How can you use this information?

Understand sector trends

Set the context for rural banks

Compare your rural bank

Strong returns …

“MIX Super Bank” serves 2x more borrowers than peer rural banks, and earns higher returns. What drives returns?

… from high revenues …

“MIX Super Bank” has much higher (+33%) revenues to cover costs and still maintain strong returns. What drives revenues and costs?

… from high yield and allocation …

“MIX Super Bank” has higher yield, and maximizes its yield through high asset allocation to portfolio. What about costs?

… but high costs …

“MIX Super Bank” has higher costs due to higher operating expenses. What drives its higher operating costs?

… due to salary structure.

“MIX Super Bank” maintains same productivity as peers, but high salary structure raises costs. So, in summary …

SummaryMIX Super Bank

Philippines Philippines Rural Bank

Indonesia Rural Bank

Return on Assets 1% 1% 1% -1% 

Financial Revenue/Assets 31% 31% 22% 24%

Total Expense/ Assets 29% 31% 22% 23% 

Portfolio Yield 35% 43% 30% 29%Portfolio to Assets 83% 66% 67% 69%

 Financial Expense/Assets 5% 5% 5% 10%

Provision for Loan Impairment/ Assets

2% 2% 1% 3%

Operating Expense / Assets 22% 23% 12% 9% 

Average Salary/ GNI per Capita 427% 239% 261% 195%Borrowers per Staff Member 100 109 95 48

Despite high salary structure, “MIX Super Bank” achieves high returns through strong yield and asset allocation.

Benefits to you

Realistic context on the market Benchmarks for peer performance Quick identification of strengths, weaknesses, and

drivers of performance Comparable information recognized globally by

1000s of microfinance providers, 100s of investors, and regulators and networks.

CPRs are FREE to participating banks!!!

How to participate

Provide current data to MABS or MCPI Audited financial statements One page questionnaire (outreach, product,

portfolio, background of organization) Deadline: August 2009 – elarson@themix.org

All benchmarked institutions receive Custom Performance Report Trend Report (with 2-3 years data) Recognition in MicroBanking Bulletin (MBB) Inclusion in analytical reports Profile on MIX Market site for global visibility

MICROFINANCE INFORMATION EXCHANGE, INC.

The leading provider of business information and data services for the microfinance industry.

THANK YOU!!!

Web: www.themix.org

Email: info@themix.org

Headquarters:

1901 Pennsylvania Ave., NW, Suite 307Washington, D.C. 20006 USA

Other Locations

Lima, Peru ● Dakar, Senegal ● Gurgoan, India ● Jakarta, Indonesia