Transcript KPS Impact Assessment Findings

UFI Organizational Appraisal
April 21, 2007
Impact Assessment Objectives
• Determine the impact of the program to primary
stakeholders
• Identify accomplishments of program objectives against
targets
• Assess the balance between financial sustainability and
social responsibility of microfinance institutions
• Craft recommendations to make the programs more
effective and efficient
Sample Size Formula
N = NZ2p(1-p)
Nd2+Z2p(1-p)
Where:
• Z = 1.96 (the value of the normal variable for a reliability
level of 95%. This means having a 95% reliability in
obtaining the sample size
• p = .50 (the proportion of getting a good sample)
• 1-p =.50 (the proportion of getting a poor sample)
• d = .05 (sampling error)
• N = population size
• n = sample size
Sample Size
Ugyon
Actual # of Respondents
103
Minimum Sample Required
94
Sampling error
10%
Confidence level
90%
Areas of Impact Assessment
•
•
•
•
•
Household level
Enterprise Level
Diet and Coping with Difficult Times
Product and Service Delivery
Gender and Violence
Profile of Respondents
Sex
Ugyon
Female
83.5%
Male
16.5%
Age
< 25 years old
7%
26-35 years old
19%
36-45 years old
30%
46-55 years old
32%
56-65 years old
10%
>65 years old
-
Profile of Respondents
Civil Status
Progressive
Ugyon
Married
85%
81%
Single
4%
7%
Widow
7%
12%
-
1%
Literacy
100%
100%
Elementary
27%
41%
High School
46%
40%
College
24%
18%
Separated
Educational Level
Profile of Respondents
Loan Cycle
Ugyon
1st
44%
2nd
16%
3rd
16%
4th
16%
5-15th
5%
>15th
-
Length of Membership
<1 year
41%
1-2 years
58%
3-5 years
-
>5 years
-
Significant Findings
• Findings that have significant correlation shall be
given focus and emphasis
• Pearson’s formula for correlation with a
confidence level of 99% and 95% were used
• Sample size was determined using 92.5%
confidence level
Correlation Coefficient
Correlation Coefficient
Interpretation
1.00
Perfect positive correlation
0.75 – 0.99
Very high positive correlation
0.50 – 0.74
High positive correlation
0.25 – 0.49
Moderately small positive correlation
0.01 – 0.24
Very small positive correlation
0.00
No correlation
-0.25 – -0.01
Very small negative correlation
-0.50 – -0.26
Moderately small negative correlation
-0.75 – -0.49
High negative correlation
-0.99 – -0.74
Very high negative correlation
-1.00
Perfect negative correlation
On Correlations
• Correlation does not establish cause and effect
relationship.
• A positive correlation only means that the
relationship moves toward the same direction.
• A negative correlation means that the relationship
moves toward the opposite direction.
• A positive or negative correlation does not mean
that the correlation is good or bad respectively.
Significant Correlations
• No significant correlation for Ugyon Foundation
Diet and Coping with Difficult Times
Diet
Diet Improved
Ugyon
-
Diet stayed the same
80%
Diet worsened
20%
HH ate less due to lack of money
97%
Difficult Times – borrowed fr:
Friends and relatives w/o %
26%
Left area to seek employment
32%
HH member got employed
13%
Enterprise Level
Expenditures from Business Income
Ugyon
Food
100%
School
72%
Reinvest in business
6%
Invested in new business
Health-related
9%
Invested in new products
HH expenses/Bought HH items
76%
Hired employees
5%
Savings and Purchases
Purchases to Improve Business
Ugyon
Purchased small accessories worth 2,500
92%
Bought major tools
9%
Bought vehicle
2%
Improved business site
1%
Improved storage
1%
Savings and Investment
Have savings for investment
24%
Increase in savings
14%
Savings stayed the same
9%
Decrease in savings
2%
Savings
Ugyon
Save frequently
Where do clients save?
Commercial bank
15%
Rural Bank
85%
NGO
-
Purpose of Savings
Emergency
88%
Re-invest in business
65%
Education
76%
Medication
Buy new assets
15%
Savings
Ugyon
Amount of weekly savings
PhP 5-10
12%
PhP 11-20
8%
PhP 21-50
70%
Php 51-100
11%
Desired Interest on Savings
3-4%
-
5-6%
12%
7-8%
-
>8%
88%
Client Management Capacity
Ugyon
Currently Perform
Perform before
membership
Separate business from personal finance
10%
100%
Record income and expenses
100%
100%
Identify which product is most profitable
100%
100%
Lack capital to do business
93%
Gender and Violence
Ugyon
Area of Decision Making Both
Wife
Husband
Business
65%
21%
9%
Household Expenditure
48%
44%
5%
Education of Children
55%
29%
7%
Access loans w H consent
100%
Shared loan with Husband
39%
H used to loan benefit HH
30%
H physical strength to W
0%
Feminization of Debt
Foregone exp. to pay
100%
Foregone bus. Opp.
96%
H vice increased
1%
Loan Use: Type of Business
Ugyon
Invested part of loan in business
99%
Type of Business
Trading
66%
Manufacturing
10%
Service
13%
Farming
3%
Animal Raising
23%
Loan Use: Loan Proceeds
Ugyon
Food
99%
Pay other debts
78%
Clothes or HH items
27%
Emergency
19%
HH improvement
21%
Celebration
1%
Loan to Others
1%
Income Trend
Income Trend
Ugyon
Increase
4%
The same
46%
Decrease
51%
Increase in Income
Expanded business
1%
Increase in demand
3%
Decrease in Income
Natural disaster
Poor agricultural season
5%
Poor sales
26%
Delinquency and Difficulties
Delinquency
Reported at least one missed payment
Ugyon
0%
• Reasons for delinquency
– Decrease in sales
– Self or Household Member got sick
Difficulties
Ugyon
Experienced evacuation due to calamity
26%
Received relief operations from MFI
0%
Members Like Best
Features
Ugyon
Benefits and other products and services
54%
Low interest rate
24%
Efficient and fast processing
68%
Access to capital
32%
Training
Group dynamics
8%
Members Like Least
Features
Insurance scheme and pre-deductions
Forced savings
High interest rate
Dislike loan officer
Ugyon
100%
Product Design
Loan Amount
< 5,000
Ugyon
15%
5,000 – 10,000
57%
11,000 – 20,000
26%
21,000 – 30,000
-
Loan Term
1-2 months
3-4 months
15%
5-6 months
84%
Product Design
Available Collateral
HH Assets
Ugyon
81%
Chattel
Livestock
Co-maker
19%
With resigned members
49%
Other Service
Emergency loans other loans
100%
Client Exit Interview
# of Resigned Members
Decided to leave by themselves
LOAN USE
Ugyon
5
60%
Helped to start up a business
Helped keep the business
Helped expand the business
100%
-
IMPACT OF LOAN TO HH
Improved family diet
100%
Education of children
Improved housing
100%
60%
Purchased furniture, appliances etc.
20%
Reasons for Resigning
Ugyon
Center Problems
Personal problems with the member
Disagreements with the center officers
-
Not willing to attend center meetings
Cannot follow center policies
Problems related to policies
-
Loans are too small
Problems with MFI personnel
Found another program that is better
20%
Reasons for Resigning
Ugyon
Business-related reasons
Seasonal business. Will apply again.
Low sales and profit
60%
Closed down business
Personal reasons
Used for family crisis
20%
HH member left, I cannot maintain bus.
Got pregnant
I am moving away
20%
Economic and community-related
Business was destroyed by catastrophe
-
40%
Repayment Experience and Change in Income
Ugyon
Experience in paying last loan
Good
Easy to repay
100%
20%
Difficult
Change in income
Increased substantially
20%
Increased slightly
Remained stable
40%
60%
-
Group Dynamics
Ugyon
How did the center help you?
Make loan payments
When I had personal problems
100%
80%
By providing business ideas and contacts
Make friends
Develop my leadership skills
100%
100%
80%
Receive training
Center weekly meetings
Very helpful
100%
Did not help very much
Didn’t like them
100%
-
The Future
Ugyon
Will you return to the program?
Yes
Maybe
No
Only if there are changes made
60%
40%
-
Encourage relative/friend to join?
Yes
No
100%
-
Organizational Assessment
• Governance
• Information System Evaluation
• Capability Needs Assessment for Top
Management and Key Management Staff
• Organizational Development
• Financial Evaluation
Responsibilities of MF BOT
•
•
•
•
•
Legal obligations
Relationship between board and executive
Setting policy and providing strategic direction
Fiduciary obligations
Board assessment of its own performance
Skills (8.09)
8.56 Read FS
7.82 Environmental
Scanning
8.19 Leadership
8.55 Mktg/PR
7.91 Rules and
Regulations
7.47 Knowledge in MF
7.98 Knowledge in
banking
7.83 Analytical skills and
decisiveness
8.48 Communication
Knowledge and Skills of MF BOT
•
•
•
•
•
•
•
•
Business Sense
Microfinance Experience
Finance
Legal and Regulatory
Marketing
Public Relations
Technology
Fundraising
Behavior (9.09)
8.08 Professional work
habits/ethics
8.92 Moral ascendancy
8.87 Receptive or open
minded
6.60 Visionary
8.40 Honest
9.21 Humble
9.30 Patient
8.88 Dedicated and
committed
9.16 Responsible
9.27 God-centered
9.41 Good business sense
8.55 Resourceful and costeffective
8.55 Initiative/proactive
8.92 Optimistic
Characteristics of Good Information Systems
•
•
•
•
•
•
•
•
•
Timely
Reliable
Accurate
Easy to Use
Appropriately Detailed Reports with just ‘enough’
information
Meet needs of various user categories
Secure
Good internal controls built in
Benefits of having information exceeds investment costs
Capability Needs Assessment
Respondents
Ugyon
Field Staff
12
Middle Management
Top Management
2
1
Support Staff
-
Fundamentals of Microfinance (Ugyon)
• Described microfinance as provision of financial services
(27%) for the poor (87%)
• 67% provision of credit
• Benefit of MF – (67%) access to savings, loans and
insurance; (20%) improve the quality of live; (20%) job
creation; (7%) low interest; (7%) empowerment
• Challenges – (33%) client relations and delinquency;
(20%) deal with different attitudes of clients; (20%) risks
such as hold-up; (13%) client drop-outs; (13%) reach
vision and targets; (7%) leadership; (7%) incentives; (7%)
not viable products; and (7%) competition
• MF Clients – (33%) entrepreneurial poor; (13%) good
payer; (7%) women; (7%) poorest of the poor; and (7%)
willing to abide with the rules and regulation of the MFI
Product Design (Ugyon)
• Market Research
– 87% conducted market research
– 67% area/community survey; 20% study of clients’
needs; and 20% study for product innovation
– 47% market research is done before entering an area
– Promotion is through (33%) seminars/CGT and
(20%) courtesy call
• Character-based lending
– 73% familiar with character-based lending; however
only 20% adequately described this
– Loan analysis done by 3-5 persons; equated with
CIBI
DQ Rating System
Score
Description
Congratulations! Your organization has all the necessary systems,
35
policies and procedures to prevent delinquency. You probably don’t
need to attend this training.
26-34 Your MFI has adequate systems, policies and procedures to prevent
delinquency. Just a little improvement and you already have adequate
safeguard to delinquency.
16-25 Your MFI may be exposed to delinquency problems OR you may be in
the midst of a delinquency crisis.
6-15
Your MFI has serious delinquency problems. Systems, policies and
procedures invite delinquency.
1-5
Re-think your MFI’s presence in the microfinance program.
DQ Rating Scores
• Overall – 29 points (Ugyon)
Your MFI has adequate systems, policies and procedures to
prevent delinquency. Just a little improvement and you
already have adequate safeguard to delinquency.
Financial Analysis (Ugyon)
• Financial performance description
– Very limited ‘elevator’ style of description
– 73% was not able to answer the question
• Examples of indicators
– No one was able to give financial indicators for
quality, efficiency, profitability and financial
structure
– 40% was able to give some standards for portfolio
quality but none for the remaining indicators
Internal Control (Ugyon)
• 47% expressed that there was
fraud; 47% said no fraud
occurred
• 100% of those who expressed
that there was fraud were able to
describe it
– Over riding the loans
– Not remitting
collections
– Hold up
– Juggling
• Supervisors check their files
(100%)
– 13% daily; 13%
weekly and 73% no
answer
• 80% said that internal control
was conducted but was unable
to provide adequate description
of internal control function
• 67% does collection and
bookkeeping at the same time
• 93% reported that they are
covered by cash bond
Remuneration and Incentives (Ugyon)
Remuneration
60%
53%
33% 33%
50%
40%
30%
27%
20%
20%
10%
13%
13%
7%
0%
<4K
4-6K
7-9K
Actual
10-12K
13-15K
16-18K
Desired
Desired Monthly Incentives
47%
1
0
0
0
0
0
0
0
0
0
-
7%
1K
1.5K
13%
2.5K
7%
3K
13%
4.5K
5K
>5
Organizational Development
Organizational Development (Ugyon)
• Vision and Mission
– UFI
• Helpful and progressive
• Challenging and risky
– Important in UFI
• Relationship between clients and AO
– Uniqueness of UFI
• Ugyon means “unity / cooperation”
• Professionalism of AO – wear right uniform with
high heels
Organizational Development (Ugyon)
• Training and Development
– With limited skills to perform well
– Do not know root cause of problems encountered –
want guidance and support from supervisors
– Very few are sent to trainings identified by the head
office
• Mostly Job-related
Organizational Development (Ugyon)
• Leadership
– Management style
•
•
•
•
•
Lacks consultation
Lacks consideration
Too much pressure that causes resignation
Top Management is easier to talk to
Do not really know BOD
– Promotion
• Good performance in job
• Of senior status
• But not clear what the real indicators are
Organizational Development (Ugyon)
• Career Development and Planning
– Willingness to be OIC
• Yes to BM, AM, or unit head positions
• No to CEO position
– Lack of cross-trainings and job rotations
– Lack of knowledge about the responsibilities of
other positions
Organizational Development (Ugyon)
• Performance Management
– AO evaluated by supervisors monthly and by area
head quarterly; no performance evaluation for
support staff
– No Feedback
– All do not feel justly compensated
Organizational Development (Ugyon)
• Rewards Management
– Behaviors
• Performance-based
– Rewards
• Cash incentives for AO and Supervisors; none for
Support staff
• Tour to other country for mid to top-management
Organizational Development (Ugyon)
• Employee Relations
– Treatment like a family / friends
– Resolution of conflict during informal talks
– Open communication lines only on same level
personnel, not so much on vertical positions
– Seeming gap between AOs and Area Head
– Coordination is being improved between areas and
branches, and the head office
Organizational Development (Ugyon)
• Employee Well-being
– Reason for staying
• Relationship among co-workers
• Excitement of work
• Some were expecting different kind of work when
they applied
– Little time for family and other interests
– Manifestations of care
• Treatment of top-management (sir Red)
• Privileges such as staff loan
Organizational Development
• Planning (Ugyon)
– Yearly
– For change and development
• Training and capacity building for staff
• Salary and other benefits
• Management of Area Head
Training and Mentoring Assistance
Training and Mentoring Assistance
• Customized training to management staff and
board of directors
– readily applicable tools that could be implemented
immediately
– recommendations to improve in policies, systems
and procedures
– could be credited towards a diploma course with
the Ateneo de Manila University
• On the job and real time application of learning
• Less disruption in day to day operations
Training and Mentoring Assistance
• Regular and intensive offsite performance
monitoring
– Open communication lines between the executive
director, chair of the board and SEDPI
• Affordable
– More number of staff participating
– On site
– Performance-based
• Could be credit towards a diploma course
TAMA
• 6-18 months program depending on the
organizational appraisal result
• Partnership
– SEDPI recommends. SEDPI will never impose.
– UFI is free to choose
TAMA for UFI
•
•
•
•
•
•
•
Financial Product Design and Development
Character and Capacity Based Lending
Delinquency Management
Financial Analysis
Human Resource
Internal Control and Audit
Strategic Planning
Financial Product Design and Development
1 2 3 4 5 6 7 8 9 10
Competition analysis
Developing the product
prototype
Planning for pilot test
Monitoring pilot test
Developing the product
manual
Developing promotion
materials
Product launching
11 12
Character and Capacity Based Lending
1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
Lending policy and
practices review
Training for loan officers
Training for branch
managers
Designing new or
revising forms
Finalizing flow chart of
processes
Monitoring CBL
Changes
Delinquency Management
1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
DQ Training
Delinquency
Management Workshop
Remedial management
Monitoring progress
Financial Analysis
1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
Financial analysis
training for Mgt
Financial analysis for
BOT
Asset Liability Mgt for
Top Mgt
Monitoring performance
Governance and Human Resource
1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
Designing Incentive
Schemes
Strategic Planning
Workshop
Organizational
Architecture
Supervision Training
Strategic Plan Analysis
& Docu.
Internal Audit
1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
Conduct of Internal
Audit
Installation of Internal
Audit