Transcript Slide 1

QA - Rating
Welcome
Rating System - GRADES
QA - Rating
Outline
• Rating system evolution
• Rating concept & methodology
GRADES
• Rating system development process
• Rating process
• Other information about Rating
• Rating other activities
QA - Rating
Rating
Concept & Methodology
QA - Rating
Rating.. the concept
Assessment
Rating
Standard
Gap Analysis
Capacity Building
QA - Rating
Rating
Focus:
SMFIs and SHPIs (NGOs, Special
Projects etc.)
Objectives:
• To assess Credit Worthiness
• To assess Self Management, Financial Viability
and long-term Sustainability
• To identify Gaps for planning Capacity
Building inputs
• Benchmarking for promotion of Best Practices
• Generating awareness for Self-Assessment
QA - Rating
Rating Process
Sadhikaratha
Foundation
Client
Request for
assessment and LoU
Assign QA team to
Conduct Assessment
Collection of Information,Preliminary
Analysis and Debriefing
Data Analysis
Approval
Committee
Draft Report to Client
Monitoring and
follow up
Final Report to Client
(Dissemination of rating
findings/publication)
QA - Rating
Rating System Development
QA - Rating
Review of Tools
GIRAFE
(PlaNet
Finance)
CAMEL
PEARLS
(WOCCU)
(ACCION)
Rating
System
The
Philippine
Coalition
for Microfinance
Standards
Micro
Rate
M-CRIL
QA - Rating
Review of various SHG Tool
• Review of tools used
by DRDAs, DHAN,
MYRADA, BASIX,
OUTREACH, DPIP,
NABARD, CARE, etc
• Identify the Key
Variables
• Decided relative
weights of variables
• Preliminary Tool
Prepared
QA - Rating
Ratomg system development process
S#
Stage of QA development
1
Review of Literature
2
MoU with M-CRIL
3
QA system developed
4
Field Testing - I of Rating
System
5
Revision of the Rating
system
6
Field Testing - II of Rating
System
7
Meeting with NABARD
8
State Level Consultation
9
District Level workshops
10
Meeting with MF team, SERP
11
GRADES developed
12
Pilot Testing
Year 2002
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Dec
QA - Rating
G R A D E S 2.0 Weightage
Marks
Category
G
R
A
D
E
S
Weight
Governance
80
16%
Resources
30
6%
Asset Quality
50
10%
Design and Implementation of Systems
50
10%
Efficiency and profitability
60
12%
Services to Constituents or SHGs
30
6%
200
40%
500
100%
SHG Performance
Overall Total
QA - Rating
Key Areas in Federation Assessment
Governance
– Quality of Board
– Understanding of the board members
• Vision, Mission and Goals
• Performance level of the member SHGs/VOs
• Functioning of the Organisation
• Role & Responsibility of Board
– EC/ Board Meeting
– Decision making process (including staff
recruitment)
– Selection of Board
– Accountability & Legal Compliance
– Member Satisfaction
QA - Rating
Key Areas in Federation Assessment
Resources
– Human Resources
• Competence in work (theoretical concepts)
• Roles and responsibilities performed
• % of women in total staff and % of local staff
• Long pending advances with staff (> 3 weeks)
– Financial resources
• Total funds available per member SHG
• Idle funds
• Repayment rate of External Loans
• Capital Adequacy (Net Worth/Risk Weighted
Assets)
QA - Rating
Key Areas in Federation Assessment...
Asset Quality
– Loan Distribution (outstanding) in terms of
SHGs
– Loan Adjustment/Rescheduling
– Recovery rate of o/s loans (as on date)
– Portfolio At Risk > 90 days
– Portfolio At Risk >180 days
– Arrears Rate > 90 days
QA - Rating
Key Areas in Federation Assessment...
Design and implementation of systems
– Accounting system
• Regular updating of records & books
• Accuracy of recording (correctness)
– MIS
– Internal Control Mechanism
QA - Rating
Key Areas in Federation Assessment...
Efficiency and Profitability
– Efficiency
– Staff Efficiency (related SHG operations)
• SHGs per staff (all SHGs/ all full time staff)
• Total Outstanding Portfolio/Total staff annual
salary
– Operating Efficiency (Operating Cost Ratio)
– Profitability
• Yeild on portfolio/Annualise percentage rate
• Operational Self Sufficiency (OSS)
• Financial Self Sufficiency (FSS)
QA - Rating
Key Areas in Federation Assessment...
Services to constituents or SHGs
– Financial Services
• Regular Savings
• Loans
• Insurance
– Non- Financial Services
• Bank Linkage
• Training to SHGs/VOs - leaders, members, staff
• Monitoring of SHG/VO performance
• Annual Grading of SHGs
• Auditing of SHGs' accounts
– Development initiatives
QA - Rating
Key Areas in SHG Assessment...
SHGs Performance
–
–
–
–
–
–
–
–
–
–
–
Homogeneity
Regularity – savings, meetings
Book keeping
Participation
Awareness level
Repayment patterns
Group norms
Democratic functioning
Transparency in operations
Social empowerment
Financial performance
QA - Rating
Grading Scale
Score
Grade
Description
>90%
A+++
85.1% - 90%
A++
80.1% - 85%
A+
75.1% - 80%
A
Emulation with modification, reasonably high level of Self-Governance
and good quality of operations
70.1% - 75%
A-
Reasonably high level of Self-Governance and good quality of
operations
65.1% - 70%
B+
Moderate level of Self-Governance and good quality of operations
60.1% - 65%
B
55.1% - 60%
B-
Needs Capacity Building (CB) assistance to improve level of SelfGovernance and quality of operations
50.1% - 55%
C+
Needs substantial CB assistance to improve level of Self-Governance
and quality of operations
<50%
C
Worth emulation, very high level of Self-Governance and excellent
quality of operations
Worth emulation, high level of Self-Governance and excellent quality of
operations
Emulation with modification, high level of Self-Governance and good
quality of operations
Moderate level of Self-Governance and moderate quality of operations
Needs substantial inputs – Low level of Self-Governance and poor
quality of operations
QA - Rating
Rating Process
QA - Rating
Level of Effort for Rating of an federation
Activity
Person
Days
Preparatory Work
1
Field Travel & Data Collection
6
Data Analysis & Draft Report Preparation
4
Feed-back from clients/ Approval Committee
1
Finalization
2
Total
14
Assessment always done by a 2-member professional team
QA - Rating
Triangulation of Data
NGOs
Samakya
QA - Rating
Tool / systems development
Name of the
Tool/System
Status
Description
GRADES
Revised and being
used
For assessing SMFIs (SHG and Grameen Model
federations) who are engaged in financial
intermediation
Coop R A T E
Finalised to be shared
with the CDF
For assessing Cooperate model of federations
(who would not receive the outside borrowing)
Rapid Assessment
Tool (RAT)
Finalised and is being
used in some Dists.
Rapid rating of SHG federation performance by
field staff with minimum training, to know status of
their own promoted federations
Commitment Tool
(for SHGs with
disability members)
Finalized, shared with
Commitment NGOs
To assess the performance of SHGs which have
disability (incl. SHG and Disability related
indicators)
Social Intermediation
Tool (SIT)
In progress (Prototype tool finalized)
For assessing of SMFIs who are engaging social
intermediation
Self Assessment Tool
(SAT)
In progress
(indicators finalized)
Self assessment of SHG federation by Board
themselves on periodical basis
SHG Rating
Developed shared with
MAVIM
For assessing the performance SHGs
Data Base
Draft version finalized
To create data base for Quality Assessment done
by team
QA - Rating
Lessons learnt
• Rating system for SMFIs is needed
• Consolidation presentation leads to action plan
 Where ever NGO is there significant improvement in federation
after Rating (some follow up)
 Follow-up support is must, hence need to be packaged for all
future Ratings
• Flexibility to spend more time in field if necessary
• Split in qualitative indicators, no scope for subjectivity and bias
in Grades-2.0
• Board members presence while making a presentation of
consolidated findings is useful
• Action plan workshops post Rating, to be included for all Self
Help Promoting Institutions (SHPIs)
QA - Rating
Lessons learnt
• Report writing to include local jargon/dialect and reduced
technical jargons
• Gaps in data entry/collection taking lot of time during
preparation of consolidated presentations
• Reports to be reached to all levels – promoter, staff and
federation
• Improvement in report writing with specific implement-able
recommendations, rather than making broad suggestions.
• Information about Rating dates to be given to Federations
• Regular and periodical Impact Studies and follow-up visits
• Regular monitoring/post follow-up with Action Taken Reports
• Share of fee to be borne by Federation for the Federation to
own the rating
QA - Rating
Issues/Concerns/Challenges
External
Complex of rating for different federations
Doing Rating and Follow-up by Rating team
Meeting the demand for Rating
No significant demand from FIs
Availability : Data (FSs, loan schedule) and concern staff
Credibility for GRADES
Client acceptance
Internal
Retention quality staff and availability competent staff
Data integrity, database management (incl. tracking the impact)
Integration of Rating & Capacity Building
QA - Rating
Rating System is not…
• a Self Assessment Tool
• an Impact Study
• a Guarantee of future performance
• considering Level of Operations
• considering Local Socio-economic conditions
QA - Rating
Thank You