social rating caja sullana peru - microrate l.a....the municipal bank (cmac) sullana, caja sullana...

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The Rating Agency for MicrofinanceThe Rating Agency for Microfinance

Social Rating CAJA SULLANA Peru

Moderate social return through the combination of Moderate Social Performance and Moderate Social Commitment

Social Result Moderate

Social Commitment Moderate

Date of visit Jan-10 Previous rating N.A. Date of previous visit N.A. Number of Social Ratings 1st

Descriptive Summary The Municipal Bank (CMAC) Sullana, CAJA Sullana was founded in 1986. CAJA Sullana original target market was sectors of the population excluded from traditional banking. CAJA Sullana growing network of 43 agencies is located along the entire length of the Peruvian coast, with a primarily urban and suburban focus. Its portfolio of US$257 million, 36% of which is microcredit, is focused on the middle microfinance niche of the Peruvian microcredit market. Although the average loan size is approximately US$2,950 dollars, the average loan size of new microcredit loans is $1,066.

Rating Rationale CAJA Sullana has medium level of social return. Branches are principally located in urban areas, with a focus on a target niche in areas with less poverty, therefore presents moderate Social Results. Social commitment is moderate;; opportunities for improvement include better communication of the mission and monitoring its implementation and fulfillment.

An average loan size of US$2,950 reflects a focus on clients with a greater purchasing capacity, lessening the level at which operations reach populations with reduced access to financial services. The excellent efficiency levels attained permit a cost effective structure that is favorable and competitive. The

financial solvency ensures continued operations over time.

Institutional responsibility, primarily towards employees, is noteworthy and has permitted a high level of institutional identification. The moderate social commitment reflects the unclear manner in which the mission is communicated to personnel, as well as an organizational culture that shows little social focus. In fact, the Strategic Plan shows a marked focus on commercial and financial concerns. Good levels of client protection and customer service are noteworthy.

Highlights

Social Results Limited depth in credit operations Good operational efficiency despite low social

efficiency Low effective cost of credit Good profitability, ensuring sustainability Noteworthy institutional responsibility primarily

towards employees and clients

Social Commitment Little clarity in the communication of the

institutional mission Client service and protection are favorable Weak monitoring of social performance Recruiting process has a primarily financial

focus Incentive system does not include social

variables

Principal Performance Indicators Social Profile of Peru Dec-09 Poverty Index 34.8% Extreme Poverty Index 11.5% CAJA SULLANA Dec-08 Dec-09 Number of Clients 73,335 87,177 Microcredit Portfolio ($000) n.a 91,283 Microcredit Clients n.a 46,499 % Rural Clients n.a. n.a. % Female Clients 45% 45% Retention of Clients 71% 65% Average Size of New Loan $1,973 $2,372 Cost per Client $218 $281 Effective Interest Rate n.a. 52%

María Belén Effio [email protected] Akemi Kanashiro [email protected]

mailto:[email protected]


CAJA Sullana December 2009



GENERAL SUMMARY

MISSION STATEMENT

opportune and

microfinance institution that is adequately achieving its established mission, with a clear focus on profitability.

SOCIAL RESULTS

CAJA Sullana shows moderate social results, primarily associated with the limited depth1 of microcredit operations. Its social strengths include a low effective cost of credit and evident solvency and financial profitability.

DEPTH AND DIVERSITY OF SERVICES (Page 4) Initially, CAJA Sullana directed its operations towards those with little access to traditional banking, however, strong growth and competitive pressures resulted in a change of the original focus. There is limited depth of the target market. Services are directed towards populations with medium-high range credit needs and a medium level microcredit niche.

On the other hand, an increase in the range of financial services is positive.

EFFICIENCY, COST TO THE CUSTOMER AND SUSTAINABILITY (Page 6) CAJA Sullana is known for its excellent operational efficiency;; however, they are not necessarily translated into social efficiencies. Despite this, credit products are competitive and have low effective interest rates when compared to other regional microfinance institutions.

1 MicroRate uses the term "depth" to refer to the degree of penetration of the operations in market segments with higher poverty and limited access to financial services

evident financial solvency and good profitability ensures its sustainability and ability to continue offering its services over time.

INSTITUTIONAL RESPONSIBILITY (Page 6) CAJA Sullana achieves good institutional responsibility especially regarding its relationship with its employees and clients. This is reflected in healthy indicators for both turnover and retention of employees and clients, respectively.

Policies related to community development and environmental protection are not prevalent.

SOCIAL COMMITMENT (Page 7) Strong leadership at the levels of management and Board of Directors has not been enough to ensure an integrated and adequate communication of the mission. Rather, diverse interpretations were found at all levels of the organization.

Although the mission and strategic plan focus primarily on achieving financial and commercial objectives, the social commitment could be strengthened through improving monitoring, personnel selection and training processes.




COUNTRY SOCIAL PROFILE Dec-06 Dec-07 Dec-08 Dec-10Annual Inflation 2.0% 4.0% 6.6% 0.3%End of period official Exchange Rate/US$ 3.2 3.0 3.1 2.9GDP Annual Nominal Growth 8.0% 8.4% 9.8% 0.9%GNI per capita (US$) $2,980 $3,450 $3,990 $3,990GNI per capita, 40% poorest population (US$) $1,098 $1,112 $1,127 $1,127Population (millions of people) 27.3 27.9 28.8 29Poverty Rate* 44.5% 39.3% 36.2% 34.8%Extreme Poverty Rate** 16.1% 13.7% 12.6% 11.5%Source: Central Bank and National Institute of Estadistics*Measured as a percentage of people with income less than US$1068 per year, includes those who are in extreme poverty.*Measured as a percentage of people with income less than US$600 per year.

SOCIAL CONTEXT

The Peruvian economy slowed in 2009 as a result of the world financial crisis of 2008. The economic sector leaders (primarily exports of commodity goods) were most affected. Despite this, there is optimism for the first semester of 2010, where 6% GDP growth is expected, along with improvement in employment and investment figures.

The increase in economic growth over the last few years in Peru has not been proportionately accompanied by improvements in the social well-being and quality of life of the general population. The Gini Coefficient2 of 0.5 indicates that there is still a high level of economic inequality. In fact, according to CEPAL3, 10% of the wealthiest Peruvians have 34% of national income;; and 40% the poorest population have only 15%. Also, nearly 35% of the population is considered to be living below the poverty line and 12% are considered to be living in extreme poverty.

Peru is 78th in the Human Development Index, which is composed of 158 countries. relatively poor performance highlights the challenges of improving health care, education and life expectancy. Deficiencies in sanitary conditions, nutrition and education are still observed in various regions.

2 The Gini coefficient is a number between 0 and 1, where 0 corresponds to perfect equality and 1 corresponds to perfect inequality. 3 Economic Commission for Latin America and the Caribbean.

Percentage of the population whose income is greater than US$ 1,068 annual approximately.

Percentage of the population whose income is less than US$ 1,068 annual approximately. It does not include people in extreme poverty.

Percentage of the population whose income is less than US$ 600 annual approximately.

100%

80%

60%

40%

20%

11.5%

23.3%

65.2 %

Distribution of the population by poverty index

Source: National Institute of Statistics In the financial sphere, transparency standards indicate a high level of maturity and regulation of the sectorinstitutions to have a specialized department to resolve customer concerns and complaints and facilitate the delivery of complete and accurate information with respect to interest rates and contracts4.

The Peruvian microfinance market continues to be the most developed in Latin America, as well as the most competitive. As a result, MicroRate observed an increase in financial products offered and market penetration but also observed a marked increase in client over indebtedness.

4 Institutions in the Financial System offer information on the effective real loan cost.




SOCIAL RESULTS

This section evaluates the results obtained as well as the, capacity, efficiency and consistency of the institution in achieving its social mission.

CAJA Sullana shows moderate social results, primarily associated with the limited depth of microcredit operations. A low effective cost of credit and evident solvency and financial profitability are its social strengths.

Depth and Diversity of Services

This section evaluates the target market and the depth, diversity, and quality of services.

Initially, CAJA Sullana directed its operations towards those with little access to traditional banking. However, strong growth and competitive pressures resulted in a change in its original focus, which has limited the depth of their current target market.

An increase in portfolio size (prioritizing larger loans) has resulted in an increase in the average loan size and a recomposition of the portfolio. As a result, only 35% of the portfolio (52% of total clients) is designated towards microcredit5. The limited market penetration is affected by a concentration of branches located in areas with greater economic development.

For example, MicroRate observed an average loan size of US$2,950, which is much greater than the average for the sector (US$1,223). However, this indicator is influenced by the larger loans made to long standing clients, therefore, the average size of new loans would be a more accurate indicator of the target market reached.

5 MicroRate considers a microfinance institution to include all institutions that have more than 25% of total portfolio and 50% of its clients dedicated to Microcredit products.

Dec-07 Dec-08 Dec-09

Average New Loans $1,535 $1,972 $2,372

Average New Loans - Microcredit n.a $1,010 $1,066

US$

*Microrate considers microcredit to include credits of less than US$5,000 that are used with a productive end. Even the average size of new loans has increased over time, providing evidence of a shift from the initial focus. A more detailed analysis of the microcredit portfolio6 shows that average loan size is just over US$1,000 dollars, with little fluctuation.

Depth and diversity of services Dec-08 Dec-09

Percentage of clients in rural areas n.a. n.a.

Percentage of female clients 45% 45%Percentage of loan with non traditional guarantees n.a. n.a.

Average loan size per client $2,615 $2,950

Average loan size in Microcredit n.a. $1,963

Average Microcredit / Gross National Income per Capita n.a. 50%

Average Microcredit / Gronn National Income per Capita of the poorest 40% of the population

n.a. 174%

Average amount of loans of 50% of smallest credits n.a. $2,386

Number of financial products 9 9

Number of non financial products (social services) 1 1

However, when adjusted for Purchasing Power Parity7 factor, MicroRate observed that the average loan size in the microcredit portfolio is approximately US$1,963, equal to 174% of the GDP per capita of 40% of the poorest population. This percentage is among the highest observed by MicroRate, demonstrating a strong focus on the medium high niche of microcredit.

The composition of the portfolio by loan size also demonstrates high niche. In fact, only 35% of the total portfolio

6 Microcredit is considered to include all productive credits with amounts less than US$5,000. 7 Purchasing Power Parity (PPP) tries to compare in a realistic manner the standard of living between different countries, which is based on the cost of living in each country.




and 52% of clients have loans of less than $5,000. Additionally, only 5% of the portfolio includes loans of less than $1,000, which corresponds to 43% of the number of loans. On the contrary, loans over US$10,000 represent 41% of the total portfolio but only 6% of the number of loans, indicating that a few customers have very high loan size.

It is positive that despite the higher competition, the institution has been able to maintain the same proportion of female clients over the last two years (45%), providing equal opportunities for men and women.

Portfolio Breakdown

43%

14%

28%

15%

12%

25%

10%

41%

6%

5%0%

20%

40%

60%

80%

100%

Portfolio Balance Number of credits$1 - $1,000 $1,001 - $2,500 $2,501 - $5,000$5,001 - $10,000 > $10,000

CAJA Sullana has positioned itself in the large coastal cities of Peru, through an extensive branch network (43). Locations in major populated cities increase its operational outreach to more than 87,000 clients;; however, the focus of attention is on regions with lower levels of poverty (See Map).

Poverty map by region - Peru

Source: National Institute of Statistics and Information

Similar to the majority of Municipal Banks, CAJA Sullana has a wide range of services and financial products, to meet client needs. In addition to loan products, the institution offers services such as savings, remittances and debit cards.

The institution also offers its clients non-financial products, such as training courses, though on a small scale. In 2009, CAJA Sullana was able to train around 1,200 top dependable clients in topics such as marketing and cost management, among others.




Efficiency, Cost and Sustainability

This section evaluates the social efficiency and capacity of the institution to achieve sustainability.

Social efficiency and sustainability Dec-08 Dec-09

Operating expense 9.9% 10.6%

Operating expense per client $218 $278

Effective cost for a loan of US$500 n.a 58.0%

Effective cost for a loan of US$1,000 n.a 52.0%

Return on Equity (ROE)* 18.6% 27.7%

Return on Assets (ROA)* 2.9% 3.9%

Operating Margin 6.4% 6.5%

Portfolio at risk 6.9% 8.1%

Write-offs 0.3% n.a.*Adjusted Although CAJA Sullana s excellent operational efficiencies do not necessarily produce outstanding social efficiency, they offers competitive credit products with less cost to the client than other local microfinance institutions.

After several decades in operation, CAJA Sullana has achieved a remarkable 10.6% operational efficiency (measured as operating expenses/ average gross portfolio). Their efficiency is better than the average MicroRate sample in Peru and Latin America (16.7% and 26.9% at Dec-09, respectively) as a result of larger average loan size.

Although the larger average loan size per client resulted in improved operational efficiency, operating expense per client rose at the end of 2009 from its initial level to US$278 dollars, which is high when compared to the average MicroRate sample in Peru and Latin America (US$224 and US$205, respectively).

CAJA Sullana has an acceptable Social Efficiency Index8, 29x, which is slightly above the average in the MicroRate Peru sample (33.9x at Dec-09), though better than the MicroRate Latin America sample (55.9x at Dec-09).

On the other hand, Perumicrofinance market reflects low credit cost per client (62% annual in 2009) compared with the overall Latin American microfinance sector. In fact, the effective annual interest rate for microcredit is

8 The result of multiplying Operating Expenses and the Operating Expenses per client. A higher level indicates lower social efficiency.

competitive in CAJA Sullana (not more than 60% yearly), .

Amount APR* EIR**US$ 500 46.4% 57.6%US$1,000 42.4% 51.8%*Annual percentage rate**Effective interest rate, considering a composite of factors including interes, commissions, savings, etc.

Effective cost of credit for the client

The institution has maintained excellent financial results, with good profitability and stable operational margins. In Dec-09, it showed an adjusted ROE of 27.7%, much greater than the average MicroRate sample in Peru and Latin America (19.4% and 9.5% at Dec-09, respectively). Th positive evolution will enable CAJA Sullana to maintain sustainable operations.

Institutional Responsibility

This section evaluates the relation of the institution with its personnel, its clients, the community and the environment. CAJA Sullana good institutional responsibility towards its employees is reflected in healthy indicators for both staff and client retention, however, community outreach, and environmental policies, are not prevalent.

Clear personnel management policies are responsible for an excellent staff retention index (93% at Dec-09), among the highest witnessed by MicroRate. The wide range of employee benefits has generated high staff loyalty and motivation among employees.

formally established career path is one of their most valued personnel management policies along with annual salary adjustments according to employee performance and non economic benefits. In fact, the Human Resources department is very well-managed and has established an annual training plan to facilitate employee participation in post-graduate courses (masters, diplomas and specializations) paid entirely by the institution.

Although the Social Assistant manages employee problems, both work-related and personal, the lack of an independent communication channel for




employee complaints and suggestions is a principal weakness.

CAJA Sullana has shown interesting initiative by contracting an international consulting firm to study how to become one of the best places to work, demonstrating strong institutional interest in continual improvement of employee relations. Institutional Responsibility Dec-08 Dec-09

Employee turnover 11% 7%

Credit Officer turnover 11% 16%The MFI provides health insurance for full-time emplyees (additional to national health insurance)

Yes Yes

Code of Ethics and Conduct Yes Yes

A system for collecting complaints or suggestions from employees No No

A system for collecting complaints or suggestions from clients Yes Yes

The MFI shows effective interes rates, comissions and additional costs in all credits

Yes Yes

Clients are explained their rights and special conditions of contracts Yes Yes

The MFI provides its full time employees with a periodical training system Yes Yes

The MFI provides full time employees with a carrer path Yes Yes

Client retention 71% 65%

It has policies on the environment No No

Its outstanding institutional responsibility with its clients is based on high quality standards and good customer service. As a result, the institution achieved a good retention ratio, reaching 65% in Dec-09, although it decreased from 71% in 2008. It is also notable that 50% of clients have credit exclusively with CAJA Sullana, a significant percentage given high level of competition.

Responsibility to the community is demonstrated through prevention of money laundering and prohibition of financing illegal activities such as child exploitation, gambling, etc.

Some relevant initiatives also include sponsorship of cultural, sporting and health care activities.

The institution does not have any environmental policies in place.

SOCIAL COMMITMENT

Social commitment measures the social focus of the institution and the likelihood that it could waiver from its social mission in the future. The evaluation is made through an analysis of diverse internal institutional processes.

Strong leadership at the levels of management and Board of Directors has not been enough to ensure an integrated and adequate communication of the mission. Rather, diverse interpretations were found at all levels of the organization.

Although the mission and strategic plan focus primarily on achieving financial and commercial objectives, the social commitment could be strengthened through improving personnel monitoring, selection and training processes.

Mission, Communication and Leadership

The institution has a well-defined mission, although it has not been effectively communicated to personnel.

The institutional mission would be better understood through more constant and effective communication and greater emphasis on social objectives by the leadership. The missionmodification has not been clearly communicated to the staff, in particular the principal mission objective. Personnel, even at high levels of the institution, articulated diverse versions of the mission during interviews.

Although CAJA focus is on financial results, the institution has strong leadership, particularly within the Board of Directors, which is key to clearly communicating the mission, vision and institutional values and to fostering a culture with a greater social focus.

Employees have direct access to upper management in order to provide feedback, however, communication from higher to lower positions within CAJA Sullana is weak. Additionally, there is no standardized planning at the branch level and training is not uniform across branches.

Strategic Planning

The Institutional Strategic Plan emphasizes financial concerns, however MicroRate observed important




advances (still in the developing stages) to incorporate social variables and objectives.

The principal strategic objectives focus on achieving a strong national position and profitability.

s main focus is primarily financial, there are some features that show a greater social focus, such as an established dedication to strengthening human resources, improving the work environment and incorporating annual performance evaluation goals. These factors are important in the development of a solid organizational culture.

s objective to improve outreach, although proceeding from commercial interest, will have beneficial results through a greater number of clients reached. Besides, the objective to continue serving the microcredit niche market is clear, shown through its concrete goals of participation per product in the total portfolio.

Client Protection

The strict regulatory framework in which CAJA Sullana operates requires excellent customer service and high levels of transparency regarding its services. However, exceptions made to its current policy or rules, particularly regarding over indebtedness policies, increase the possibility of reducing client protection.

Client Protection Dec-08 Dec-09Is there an ethical and conduct code Yes Yes

IS there a system in place to collect complaints or suggestions from clients Yes Yes

Does the MFI divulge the effective interest rate, commissions and additional costs in all of its credits

Yes Yes

Are the clients explained their rights and special conditions in contracts Yes Yes

The level of transparency is outstanding. In fact, MicroRate accessed complete information regarding associated costs for credit, and communication channel usage. Additionally, credit analysts receive successive training courses to reinforce transparency and high quality client communication, enhancing the institutional image.

The principal regulations to reduce over indebtedness risk are the number of institutions where a client has debt, leverage limits and credit amount according to disposable income. These regulations and frequent personnel training are positive indicators;; however, tolerating exceptions

to the rules diminishes the effectiveness of client protection. For example, extended credits (authorized to clients with a limited credit payment history), are offered with less rigorous requirements, which could generate misuse by the clients or analysts and create a higher overall credit risk.

There is also opportunity for improvement through a uniform and permanent training course in ethical codes and conduct, emphasizing good customer service and appropriate employee behavior.

Customer Service

dedication to customer service is demonstrated through a specialized customer service department.

The institution currently has diverse products designed to increase convenience and meet client needs. Examples include automatic teller machines, telephone lines, and points of attention. These features are reinforced with quick service, as the number of days to disburse loans is remarkably competitive within the local market.

The customer service department is in charge of processing customer complaints and solutions with acceptable results. CAJA Sullana intends to personalize this service by dedicating personnel to this task at each branch, although limited. In fact, there have still not been any customer satisfaction studies to measure the efficiency and utility of the products offered. Despite this, good customer service has generated a high level of fidelity, resulting in 50% of clients being served exclusively by CAJA Sullana. This percentage is significant considering highly competitive market.

Monitoring

The monitoring process at the institution is acceptable, although there are important areas requiring improvement, such as social performance evaluation tools.

The institution has still not established a monitoring process that would allow it to measure the social impact of its operations, despite many years operating in the microfinance sector. The absence of clearly stated social objectives through goals and indicators largely explains this weakness. Despite the fact that the MFI has procedures that would allow it to develop this monitoring process, they have not utilized the key tools available to




implement it. For example, the information system has poorly structured socio-economic client information and there are no historical registries.

Regular performance evaluations help monitor personnel, although there have not been any work environment or customer service studies performed, which would allow for improved monitoring of employee turnover and client desertion..

Selection and Capacity Building

CAJA Sullana has an adequate recruiting and training process, although with a primary focus on operational and financial concerns, which could diminish the fulfillment of social goals. The institution tries to limit the geographic displacement of personnel through use of a decentralized recruiting process.

The institution defined employee profile prioritizes technical qualities more than a sense of duty to the community, however, this weakness is diminished during the training process when a field performance evaluation is conducted. This is essential to evaluate the dedication to social services. The initial training process takes into account aspects related to the mission and institutional objectives, although their reinforcement is weak in tenured staff. There is no specific training plan focusing on the standardization of the knowledge of the mission and institutional objectives in the branches, making identification and dedication relative across personnel.

On the other hand, it is positive that institutional goals, objectives, rights and obligations, such as the quality of service and confidentiality of client information, are constantly stressed.

Incentive System

The current incentive system does not directly incorporate variables that encourage the accomplishment of the mission and social objectives;; however, its composition indirectly contributes to social results, as one of the variables is the number of new clients, used to determine operational outreach.

Additionally, portfolio quality is considered as a control variable in the risk of client over-indebtedness.




BALANCE SHEET (LC'000) Dec-05 Dec-06 Dec-07 Dec-08 Dec-09

ASSETSCash and Banks 19,237 23,377 25,579 33,260 64,225 Temporary Investments 2,050 3,510 2,212 65 16,905 Net Loans 69,584 89,307 127,743 179,912 237,249

Gross Loans 76,149 97,589 136,559 191,789 257,163 Performing Loans 73,585 89,060 128,332 178,607 236,234 Portfolio at Risk 2,564 8,529 8,227 13,182 20,930

Loan Loss Reserve 6,565 8,282 8,816 11,877 19,914 Interest Receivables 2,613 2,905 4,616 6,747 10,278 Other Current Assets 2,648 826 519 732 375 Current Assets 96,131 119,925 160,668 220,715 329,032

Long Term Investments 785 843 2,043 2,113 1,233 Property and Equipment 3,904 5,048 5,949 6,652 8,239 Other Long Term Assets - - - - 1,494 Total Assets 100,821 125,815 168,660 229,480 339,999

LIABILITIESDemand Deposits 13,797 16,501 21,473 24,763 30,952 Short Term Time Deposits 35,312 50,284 76,049 110,572 184,605 Short Term Funding Liabilities 15,763 17,238 20,924 27,542 34,739 Other Short Term Liabilities 8,068 7,001 5,321 6,705 18,276 Current Liabilities 72,939 91,023 123,768 169,581 268,573

Long Term Time Deposits - - - 9,981 - Long Term Funding Liabilities 12,667 13,758 15,970 16,290 25,433 Quasi-Capital Accounts - - - - - Other Long Term Liabilities - - - - - Total Liabilities 85,606 104,781 139,738 195,852 294,006

EQUITYCapital 7,750 11,399 15,730 19,381 25,815 Earnings (Losses) Period 4,751 5,644 7,684 7,462 11,128 Retained Earnings - - - - 10 Other Capital Accounts 2,714 3,991 5,507 6,785 9,040 Total Equity 15,215 21,034 28,921 33,628 45,993

Total Liabilities & Equity 100,821 125,815 168,660 229,480 339,999

Source of Financial Statements Management Reports

Management Reports

Management Reports

Management Reports

Management Reports




INCOME STATEMENTS (US$ 000)(January- December)

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09

Interest and Fee Income 22,875 27,819 35,655 43,930 66,625 Cash Interest and Fee Income 20,262 24,914 31,040 37,183 56,346 Accruals (Int.. Receivables) 2,613 2,905 4,616 6,747 10,278

Interest and Fee Expense 5,245 6,896 9,163 13,155 18,905 Net Interest Income 17,631 20,923 26,492 30,775 47,719

Provision for Loan Loss 3,075 2,714 2,444 3,933 9,208 Net Interest Income After Provisions 14,555 18,209 24,048 26,842 38,511

Operating Expense 8,681 11,475 13,602 16,299 23,897 Personnel 4,152 5,394 6,754 8,548 11,502 Other Administrative Expense 4,529 6,081 6,848 7,751 12,395

Net Operating Income 5,874 6,735 10,446 10,544 14,614

Other Income 1,595 1,554 1,685 1,783 3,077 Investment Income 405 531 551 934 1,147 Other Non-Extraordinary Income 1,190 1,023 1,134 849 1,930

Other Expenses 79 153 769 991 1,516 MFI's Inflation Adjustment (if any) - - - - - Other Non-Extraordinary Expenses 79 153 769 991 1,516

Net Not-Operating Income 7,390 8,135 11,362 11,336 16,175

Extraordinary Items (398) 103 - - (118) Extraordinary Income (630) 111 - - 13 Extraordinary Expense (232) 7 - - 131

Net Income Before Taxes 6,992 8,239 11,362 11,336 16,057

Taxes 2,241 2,595 3,678 3,874 4,929 Net Income 4,751 5,644 7,684 7,462 11,128

Source of Financial Statements Management Reports

Management Reports

Management Reports

Management Reports

Management Reports




SOCIAL COMPARISON TABLE(US$'000)

Period: December 2009

GeneralGross Loan Portfolio $585,433 $124,057 $91,122 $29,032 $9,231 $756 Annual Change in Gross Loan Portfolio 95.5% 37.6% 24.1% 24.7% 9.2% -42.4%Number of Loans Outstanding 1,698,777 94,803 98,073 39,577 17,096 1,187 Annual Change in Number of Loans Outstanding 108.0% 27.8% 16.2% 12.1% 1.5% -51.3%Number of Borrowers 1,503,006 79,648 88,383 36,458 16,265 1,125 Annual Change in Number of Borrowers 104.8% 29.8% 17.5% 13.0% 3.6% -51.3%Average Loan Balance (per borrowers)-Actual Amounts $149 $390 $1,156 $882 $1,522 $3,387Deposits $354,392 $201,484 $104,236 $53,588 $11,926 $100

Productivity indicatorsNumber borrowers per credit officer 525 327 256 235 178 61 Number of borrowers per staff 241 160 116 97 74 32 Personnel Expense/Average Gross Portfolio 0.0% 7.5% 14.9% 10.9% 16.6% 60.6%Credit officers / Total personnel 81.8% 53.3% 46.5% 45.5% 39.8% 9.6%Incentive Pay as % of Base Salary 176.0% 55.0% 38.2% 33.0% 15.6% 0.0%Percent of Staff with MFI < 12 Months 4.1% 22.0% 33.7% 31.7% 40.3% 89.5%Efficiency Index 8.4 25.3 55.9 35.9 51.9 292.3

DepthAverage new loan amount (US$) $50 $418 $819 $762 $1,039 $2,372Average loan size / GNI per capita 2% 9% 53% 20% 56% 708%Average loan size / GNI per capita 40% poorest 6% 29% 215% 99% 219% 2775%Average loan size of 50% smallest loans $50 $456 $966 $857 $1,351 $2,386Number of loans < US$500 (%) 87% 68.5% 44.8% 36.2% 47.5% 11.7%Number of loans < US$1,000 (%) 100% 90.0% 69.5% 73.0% 66.3% 28.8%% Gross loans < US$500 (%) 59.0% 29.8% 19.9% 11.5% 21.5% 0.1%% Gross loans <US$1,000 (%) 93.0% 55.8% 39.9% 35.0% 35.8% 5.0%% Women borrowers 100% 84.3% 65.7% 60.5% 50.2% 38.1%% Borrowers in rural areas 100% 66.3% 42.6% 38.3% 25.0% 1.7%% Loans with non-traditional guarantees 100% 100.0% 98.7% 100.0% 95.0% 90.0%

ResponsabilityClient retention 100% 77.0% 67.9% 68.0% 65.4% 24.3%Staf f turn-over 0% 19.5% 31.2% 29.0% 26.0% 85.0%Credit of f icer turn-over 4% 17.8% 39.0% 35.6% 36.3% 137.1%

Efficiency, cost to the client and sustainabilityTotal operating expense / Average Gross Portfolio 9.9% 14.8% 26.9% 20.2% 33.0% 100.6%Operational cost per client (US$) $62 $121 $205 $188 $263 $517EIR (interest rate) for loans < US$500 47.0% 56.7% 95.2% 68.4% 88.9% 380.0%Net Income / Average equity (ROE) 40.3% 23.8% 9.5% 13.4% 4.6% -128.6%Net Income / Average assets (ROA) 17.0% 4.6% 3.4% 3.2% 1.7% -12.6%Operating margin 30.8% 6.8% 4.2% 4.5% 0.3% -13.7%Portfolio yield 140.0% 51.3% 43.9% 34.7% 29.4% 18.2%Portfolio at Risk / Gross Loan Portfolio 0.4% 3.8% 6.0% 5.2% 7.4% 29.2%Write-offs / Gross Loan Portfolio 0.0% 0.7% 2.4% 1.6% 3.0% 16.2%

BASED ON 53 MICROFINANCE INSTITUTIONS

UPPER LIMIT

1ST. QUARTILE

AVERAGE MEDIAN 3RD. QUARTILE

LOWER LIMIT




MicroRate - Social Rating Chart

Social

Rating

Measures the social return of an investment in an MFI through an evaluation of its Social Performance and Commitment.

Social Performance The MFI is rated for its social performance; focus on the poor and its targeted microcredit niche, the cost and efficiency of its services, its social responsibility and whether it achieves its social mission.

Excellent Good-‐ Moderate Weak

Social Commitment Measures the social focus of an MFI and evaluates the probability with which it could deviate from its stated social mission in the future.

Excellent Good-‐ Moderate Weak




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MicroRate Latin America: Calle Armando Blondet 261 San Isidro, Lima 27 PERU Tel. +51 (1) 628-7054

MicroRate Headquarters: 3300 North Fairfax Drive Suite 202 Arlington, Virginia 22201 USA Tel. +1 (703) 243-5340

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MicroRate Africa 1, Angle rue el Araar et bd Lalla Yacout, Casablanca Morocco Tel +212 5 22 49 10 94

Copyright © 2010 MicroRate Inc. Prohibits the reproduction total or partial without the expressed permission of MicroRate Inc. The rating that is granted does not imply a recommendation for purchase, sale or to maintain values and or instruments of the rated entity.


social rating caja sullana peru - microrate l.a....the municipal bank (cmac) sullana, caja sullana...

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