1. Assessment of Participating Banks Microfinance Performance based on MABS - EAGLE Standards 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila Eulogio Martin O. Masilungan Monitoring & Research Coordinator MABS

2. “What gets measured gets done.” “What can’t be measured can’t be managed.”

3. THE MABS-EAGLE Assessment The EAGLE assessment evaluates the performance of microfinance portfolio A management tool for monitoring and evaluating factors affecting a rural bank’s microfinance operations Has 5 performance areas with 13 indicators

4. EAGLE Indicators Efficiency Asset Quality Growth Liability Structure Earnings

5. EAGLE Indicators Cost Efficiency Loan Officer Productivity (group and individual loan) Cost per Active Borrower (group and individual loan) EFFICIENCY (30%)

6. EAGLE Indicators PAR Over 7 Days PAR Over 30 Days Loan Loss Provision Loan Loss Rate ASSET QUALITY (30%)

7. EAGLE Indicators Growth in Active Borrowers Growth in Loan Portfolio GROWTH IN PORTFOLIO (10%) LIABILITY STRUCTURE (10%) Deposit to Loan Ratio EARNINGS (20%)

8. The EAGLE Grades AA: Overall weighted score of 4.25 and above - Excellent microenterprise finance performance A: Overall weighted score between 4.24 and 3.5 – Very good microenterprise finance performance B: Overall weighted score between 2.5 and 3.49 – Average microenterprise finance performance NG: Overall weighted score less than 2.49 – Below average performance

9. So, how did banks score for the period January to December 2008?

10. Annual Assessment January – December 2008 51 banks were evaluated 5 scored AA; 3 are qualified for the EAGLE Award 20 scored A 18 scored B 8 No grade

11. Measuring EFFICIENCY

12. Result: Efficiency

17. Measuring ASSET QUALITY

18. Result: Asset Quality

22. Measuring GROWTH

23. Result: Growth – No. of Borrowers

24. Result: Growth – Gross Loan Portfolio

25. Measuring LIABILITY STRUCTURE

26. Result: Deposit to Loan Ratio

27. Measuring EARNINGS

28. Result: Earnings

29. BEST PRACTICES

30. Allot a day a week for promotional activities such as barangay visits, distribution of flyers and community events Ask AOs to work on Saturdays if there are PAR problems and low intake of new clients Ask AOs to prepare weekly prospects list Niche marketing – TODA members Best Practices

31. AREAS FOR IMPROVEMENT

32. Non-functioning MIS resulted in non monitoring of PAR status Loan Supervisors are not given authority to address delinquency issues (no delegation of authority) Inflexible products (fixes loan amount, terms, etc.) Poor customer service (long waiting lines, not enough chairs, unfriendly staff) Areas for Improvement

33. No incentives for MF borrowers who maintain high savings balance (e.g., lower interest rate, better payment terms, etc.) Areas for Improvement

34. Continue Doing Well by Doing Good and See You All at the MABS EAGLE Awards tonight!