MFI Business Plan for (Name of MFI)

Transcription

1 Annex b: Business Plan Format MFI Business Plan for (Name of MFI). Organisational Profile. Background Provide a brief history of your organisation (i.e. start of operations, donor/other support, etc.). Mission (A Mission Statement is a declaration of organisational purpose. A good mission statement should state: What issues the institution is trying to address How the institution responds to these issues Who the intended clients are). Goals / Organisational Objectives (Goals/ organisational objectives reflect how the institution intends to pursue its mission with specific statements about: The core activities The outreach goals / objectives The impact goals / objectives The institutional goals / objectives). Structure - governance and legal structure Briefly explain who governs the organization and what is its legal structure.. Microfinance environment analysis.. Describe the local economic environment (main income generating activities, existence of cash economy, inflation etc.).. Regulatory environment: Is the MFI registered or licensed?.. Competition and partnerships: Describe any existing savings and credit services in your planned areas of operation? Who provides or supports these activities? How will you compete or interact with them? You should list your COMPETITORS, products and services offered, their strong points and weak points and how you will compete with them. Please use the following format when assessing your competitors: Competitors Products & services offered Strenghts (+) Weaknesses (-) How to compete with them

2 Annex b: Business Plan Format, Version., December 008 PARTNERS. Partnering with other organisations can help your MFI to achieve its goals, improve your performance, increase outreach. These partners could be any company, organization or government agency that can assist you in your work. List some of your existing or potential partners. For each partner, identify area of cooperation, how they will support you, and how you will support them. Please use the following format when assessing your partners: Partners Areas of Cooperation How they can support us How we can support them.. Major risks and assumptions List the main environmental risks and assumptions that affect your organisation and which fall outside of your direct control and identify measures to mitigate risks. For example: i. Market for silk continues to grow ii. Inflation does not increase above % p.a. Major Risks & Assumptions microfinance environment Measure to mitigate risks Responsible parties. Clients & Markets.. Types of markets / clients Describe your target market including existing and new clients. Classify existing and potential customers by their geographic and economic activities. A. Main geographic areas Location Brief description of the area Total number of households Existing number of clients Potential number of clients

3 Annex b: Business Plan Format, Version., December 008 B. List the main economic activities in your target areas, and describe the features of each Economic activity Typical capital requirement of business Duration of business cycle Frequency of Income Season.. Client Profile Summarise client needs and preferences based on your research (such as a client survey). Consider the following: What are their savings needs? What are their credit needs? How do they save or borrow at present? What do they like or dislike about this? What suggestions or requests do they have? (e.g. products, delivery mechanism, meetings, support etc.).. Seasonality of demand For each month of the year, indicate whether demand for savings, loans and other services (where applicable) is typically high, medium, low or non-existent. Place an X in the appropriate box for each month to indicated high, medium or low demand. Then in the bottom two rows specify the estimated level of demand. A. Demand for Savings: MONTHS DEMAND High Medium Low No demand Est. % of

4 Annex b: Business Plan Format, Version., December 008 Comments: h holds saving Est. amount of savings / h hold B. Demand for Loan Type : (insert name) MONTHS DEMAND High Medium Low No demand Est. no. new loans / month Est. loan size Comments: C. Demand for Loan Type : (insert name) MONTHS DEMAND High Medium Low No demand Est. no. new loans / month Est. loan size Comments: D. Demand for:... (please specify) MONTHS DEMAND High Medium Low No demand Est. % h holds Est. level Comments:.. Major risks and assumptions List the main risks and assumptions associated with working within these market segments/ client groups and any other assumptions that have been made regarding demand for your products and services.

5 Annex b: Business Plan Format, Version., December 008 Major Risks & Assumptions clients, markets & demand Measure to mitigate risks Responsible parties. Products and Services.. Provide a summary of the products/services that your organisation is currently providing or plans to provide (savings, loans, and other services) Loan product Size range (min. max.) Term (min. max.) Repayment frequency Collateral/ guarantee Interest rate (state period & flat or declining) No. of accounts Current portfolio size Use of loan funds indicate the % of loan funds used for different sectors Sector Agriculture Handicraft/Industry Service Other % Savings product Minimum deposit Frequency of deposit Withdrawal conditions Interest rate (state period) No. of accounts Current portfolio size Describe any other services your organisation provides

6 Annex b: Business Plan Format, Version., December Action plan (If your MFI is planning to develop or refine its products or services (the product attributes and/or the delivery process), you should develop an action plan that clearly defines: the organisation s planned objectives for product/service modification the specific activities your organisation must undertake to achieve it s objectives, the person responsible for taking those actions a timeframe within which the action will be completed) Describe the actions your organisation must take in order to achieve its product/ service objectives: Product/Service Objective Specific Activities Person Responsible Complete By (date). Portfolio planning.. Complete a portfolio planning spreadsheet with projections for the next to years (using the M-Plan spreadsheet or a similar format). Ensure that the provided information in the chapters above (chapters, & ) is feed directly into your portfolio planning. 6

7 Annex b: Business Plan Format Savings and Loans Portfolio Projections - summarise your portfolio plan in the table below (use MPlan or similar planning tool) Year : Start month & year = / Month Start End of Yr. # savings accounts Savings deposits Savings withdrawals Total savings portfolio # loan accounts Loan disbursements Loan repayments Outstanding loans Year : Start month & year = / Month Start End of Yr. # savings accounts Savings deposits Savings withdrawals Total savings portfolio # loan accounts Loan disbursements Loan repayments Outstanding loans

8 Annex b: Business Plan Format..Provisioning & delinquency management: The most reliable way of measuring the quality of an MFIs loan portfolio is the Portfolio at Risk ratio. PAR = (outstanding balance of loans with one or more payments late by /0/90/80 days) / total outstanding loan portfolio Enter your current PAR levels, and your targets for the future Current Target date Target date Target date Target date Date (month / yr) PAR ( day) PAR (0+ days) PAR (90+ days) PAR (80+ days) A loan loss provision is an amount of money set aside to cover potential future loan losses. The longer a loan is overdue, the greater the provision.) Delinquency management: Does your organisation have a written policy for dealing with delinquent loans? Yes / No If you have a delinquency management policy, summarise it here. If not, outline the steps you will take to manage delinquency Loan loss provision: How you will make provision for loan loss (explain method for making provision). What is the total value of loans written off in the past months? Write-offs; Does your organisation have a write-off policy? Yes / No Summarise your write-off policy here... Sensitivity / scenario analysis: Describe how changes in key portfolio variables affect your financial viability (e.g. client numbers, loan sizes, interest rates) Variable Impact of changes in variable 6. Human Resource Management (When considering human resources, the first place to start is with an organisational chart. This enables you to see at a glance your overall staffing situation, including:

9 Annex b: Business Plan Format, Version., December 008 o The major groupings such as branches and sections o The total number of staff, as well as the numbers in each section / branch o The number of managers compared to the number of other staff o The relationships between personnel (lines of authority and communication), and whether you have a very hierarchical or flat organisational structure. o Gaps in staffing that need to be filled The organisational chart can serve as a tool for employees to understand how and where they fit into the mission of the institution. 6.. Complete an organisational chart for your organisation 6.. Roles and responsibilities List the positions identified in the chart above with a short description of the roles and responsibilities of each. Name of Staff Position Main Roles & Responsibilities 6. Staff training & Development 9

10 Annex b: Business Plan Format, Version., December 008 (Every existing and new staff member should have opportunities for training and career development. It is therefore important to have a staff training and development plan. The training plan might include a pre-service / induction training programme: comprising training on operating rules, policies and procedures of the MFI, and an introduction to the work ethic and philosophy of the organisation. In-service training should be provided to upgrade the skills and knowledge of employees in specific areas such as products and services; internal controls; systems and procedures; reporting; savings and loan account administration; branch accounting and Management Information System; Delinquency management etc. Your organisation should identify who is responsible for managing training activities and who the training activities could be provided by.) Please describe your staff training and development plans below: Training activity Details Participants Timing 6.. Action plan (It is recommended that you devise an action plan that clearly defines the specific activities your organisation must undertake to achieve its human resource management objectives. This action plan may cover such activities as: o Plans for recruitment of new staff o Changes to organisational structure o Employee performance review / job description review o Reviews of incentive schemes o A staff retreat or other activity When preparing an action plan be sure to identify the person responsible for each action and a timeframe within which the action will be completed.) Describe the action your organisation plans to take regarding human resource management. Human Resource development Objective Specific Activities Person Responsible Complete By (date) 6.. Does your organization assess staff performance? If yes, explain how. 0

11 Annex b: Business Plan Format, Version., December Does your organization have an incentive system in place to reward good staff performance? If yes, please explain how the system functions. 7. Marketing and promotion (Marketing is a continuous process that includes planning, implementing and evaluating performance. MFI marketing involves studying clients and developing products to meet their needs. It takes into consideration the competitive market, determines the position of the institution in that market, and promotes products to potential clients. Carrying out these activities effectively often requires a specific marketing plan. Marketing comprises a mix of 8 different features. Read about each of these below. For each product or service you offer, you should specify each of the following, and compare this with your competitors. Feature Details Product Includes specific product features, opening/minimum savings balances, (design) withdrawal terms, loan terms, loan disbursement times, collateral or guarantees, repayment structures Price Includes the interest rate, withdrawal costs, loan fees, pre-payment penalties, prompt payment incentives, transaction costs and other fees and discounts. Promotion Includes advertising, public relations, direct marketing, publicity, and all aspects of sales communication. Place Refers to distribution and making sure that the product/service is available where and when it is wanted. This includes such options as field workers or agents, branches, working with informal sector financial service providers, etc. Positioning Is the effort by the MFI to occupy a distinct competitive position in the mind of the target customer. This could be in terms of low price, security of savings, quick turnaround time, professional service, etc. It is a perception. Physical This is what makes the MFI and its invisible, intangible services visible. It Evidence includes the presentation of the product, how the branch physically looks, whether it is tidy or dirty, newly painted or decaying, the appearance of the brochures, posters and passbooks, etc. People Includes how the clients are treated by the people involved with delivering the product in other words the staff of the MFI. Process Includes the way or system through which products and services are delivered: the queues/waiting involved, forms to be completed etc. Source: MicroSave 7.. Describe your organization s plan for marketing and promotion

12 Annex b: Business Plan Format, Version., December 008 Who will you market your products to? Who is the main target market? What message or product attributes will you feature in your promotional material? How will you deliver the message? Advertising / logo / branding, community mechanisms 7.. Action plan (To make your marketing effective you must have clear objectives for how the marketing function will be integrated into the institution s operations, an assignment of responsibilities, and a marketing budget to carry out the different steps.) Describe the actions your organisation will undertake regarding its marketing and promotion plan Marketing & Promotion Objective Specific Activities Person Responsible Complete By (date) 8. Social Performance Management (Social performance management is an ongoing process which involves setting clear social objectives, monitoring and assessing progress towards achieving these, and using this information to improve overall organisational performance. When planning your social performance monitoring, ask yourself:. What tools/methods will you use to measure social performance?. How often will you collect data?. Who will undertake data collection and analysis of the data?. Are you already collecting this data?. How will you monitor gender inequalities? In addition to looking at the organisation s performance, it is important for an MFI to evaluate the impact it is having on its clients. MFI s activities have various types of impact on its clients: social impact (relationships); human impact (health, education); natural impact (access to land, water, infrastructure);

13 Annex b: Business Plan Format, Version., December 008 physical impact (ownership of productive and non-productive assets); financial impact (income levels, levels of savings, access to finance). An organisation s assessment should also consider the extent to which gender inequalities have been addressed and have changed. MFIs should use qualitative tools such as client survey, interviews, focus group discussions to collect data on the impact of products and services.) 8.. Describe how your organisation will manage its social performance How will you assess the organisation s performance? How will you assess social & poverty impact? How will you assess client satisfaction? How do you plan to monitor/evaluate impacts with regard to gender? How will you ensure that poverty and gender considerations are incorporated in to your regular operations? 8.. List current and planned levels of pro-poor loans (MFIs that have specific social objectives that relate to reducing levels of poverty or increasing the percentage of poor clients they serve, can monitor these objectives by measuring the number of propoor loans disbursed to clients, the MFI can analyse the extent to which it is working with poor clients and therefore meeting poverty objectives.) Pro-poor loans are defined here as falling into two categories: a) loans with an individual loan size of. million Kip or less (per client) b) loans with an individual loan size of.6 million Kip or less (per client) Pro-poor loans Current End of Yr End of Yr Number of loans <=. mill Kip p.a. Number of loans <=.6 mill Kip p.a. 8.. Action plan

14 Annex b: Business Plan Format, Version., December 008 An MFI should describe what actions it plans to take in order to institutionalise social performance management within its organisation. Specific activities should be listed with a timeline and person responsible. Describe the courses of action that your organisation will implement in order to manage its social performance: Social Performance Objective Specific Activities Person Responsible Complete By (date) 9. Financial Planning 9.. List your main funding sources (MFIs typically access funding from a variety of sources and these should be clearly identified in the financial planning section of the business plan.) Please specify how your MFI will fund its portfolio and operations, including any funding from other institutions such as Donors, Banks, Government, (I)NGOs or networks. Provide details of your sources of capital (liabilities and equity). Period Funding / Source of Capital Amount Use of funds Investor Capital (Shares, other capital) Loans / debt Savings Retained Earnings Donations/Grants specify donor Donations/Grants specify donor Other Other 9.. Income and Expenses Provide a summary of your planned income and expenses for the next or years. This should be based on your portfolio, personnel and marketing plans. Calculate your planned profit level, and your Operational Self Sufficiency (OSS). You must have a plan to reach 00% OSS. OSS = total income (not including grant income) / total expenses

15 Annex b: Business Plan Format Income and Expense Projections (use MPlan or other planning tool to generate these summary figures) Year : Start month & year = / Month Total Interest income Other income Total income Interest expense Staff costs Rent & office Vehicle costs Other expenses Total expenses Profit (loss) Grant income OSS (inc. / expenses) Year : Start month & year = / Month Total Interest income Other income Total income Interest expense Staff costs Rent & office Vehicle costs Other expenses Total expenses Profit (loss) Grant income OSS (inc. / expenses) When do you plan to reach 00% OSS (month / year)?: / (note: if you need years to reach 00% OSS then you should add a table here for year )

16 Annex b: Business Plan Format Please attach the following documents Current balance sheet Projected cash flow statement for min. year Detailed portfolio and income statement projections for min. years - if available (e.g. MPlan) 9.. Major risks and assumptions List the main financial risks, assumptions and measures to mitigate financial risks Major Risks & Assumptions financial Measure to Mitigate Risk Responsible parties