Performance Indicators for Microfinance Institutions (Technical Guide) (2024)

FAQs

What are the core performance indicators for microfinance? ›

financial performance indicators: These are KPIs that measure the financial viability and sustainability of an MFI, such as profitability, efficiency, productivity, liquidity, solvency, and portfolio quality.

Measuring Performance of Microfinance Institutions: A Framework for Reporting, Analysis, and Monitoring, is a training course to provide microfinance practitioners with the skills, knowledge and tools to develop financial statements and reports for meaningful analysis and monitoring, and that are in accordance with ...

The review shows that the most important determinants addressed in the literature are MFI characteristics (size, age and type of organization), their funding sources, the quality of organizational governance and the MFIs' external context such as macro-economic, institutional and political conditions.

MFIs financial performance is based on the extent to which service users directly pay the full cost of providing services (Adhikary, 2014). As such operational efficiency, capital levels, liquidity risk, credit risk and size are some of the major factors that influence financial performance of microfinance banks.

We've broken down our list of KPIs into the four categories of the Balanced Scorecard: Financial, Customer, Process and People. Make sure you select a few from each category so that your strategy is well-balanced across the organization.

Greenfield microfinance banks are meant to operate according to global best practices in corporate governance, credit methodology, product design, anti–money laundering standards, and social and environmental standards.

The study found five factors (risk management strategy, management technique, auditing system, loan lending system, and marketing approach) which were influenced the performance of MFIs.

Firm‐specific factors (firm size, financial leverage, retention ratio, liquidity, premium growth rate, loss ratio, re‐insurance dependence, and macroeconomic factors (market share, GDP per capita, and inflation) are included in the model.

Microfinance performance theory states that for any microfinance institution to be seen as achieving its goals, its performance must be analyzed based on key indicators such as profit margin, client outreach, operational self-sufficiency, portfolio at risk, return on assets, return on equity, cost of funds ratio, ...

What is the main challenge with microfinance? ›

The main challenges on microfinance are higher Interest Rates in comparison to mainstream banks widespread dependence, over-indebtedness, inadequate investment validation, lack of enough awareness of financial services in the Economy and among others. Gladys Velez Thank you for your valuable input.

MFI values integrity, fairness and honesty in all business dealings. Trust is the cornerstone of our business and it will never be compromised. MFI values diversity and neutrality. We serve poor people on the basis of need not ethnicity, religion or political affiliation.

Key performance indicators (KPIs) are measurable and quantifiable metrics used to evaluate and assess the performance of your company or organization's activities. It's commonly used in sales and marketing to track revenue generation, customer acquisition, conversion rates, and more.

Key performance indicators include: Revenue, expenses, and operating profit: Financial KPIs are mainly determined by the revenue banks and credit unions bring in, the costs incurred, and their profit.