Monday, March 14, 2011

Business Planning and Financial Projections with Microfin

Business Planning and Financial Projections with Microfin

Washington DC, USA, 23 - 27 May 2011

Summary
This course guides participants through a step-by-step process for developing a business plan and financial projections for a microfinance institution using Microfin 4.0, the sophisticated financial projections software that was developed by the facilitators of this training course, Chuck Waterfield and Tony Sheldon, with financial support from CGAP, Women’s World Banking, and Sida.

Microfin has long been the microfinance "industry standard" for planning and budgeting. Microfin allows you to develop detailed five-year financial projections and budgets for your institution, and to simulate the impact of key decisions on your institution.

Microfin 4.0 includes 200 major enhancements over Microfin 3.0, including an expanded range of financial products, improved guidance and error-checking features, versatile graphing, and much more.

This fast-paced course is designed to be highly participatory, with a large amount of hands-on time working in groups at the computer, applying the software to a detailed case study. In addition to the course manual, at the conclusion of the course, participants will receive a CD-ROM containing Microfin and the User’s Handbook.

By the end of the workshop you will have a better understanding of:

  • how to use Microfin to develop financial projections for your own institution
  • practical approaches to planning
  • the most important financial ratios to monitor, and how to interpret them
  • critical operational issues such as designing products to meet client needs, pricing your products, and focusing on loan officers to leverage institutional productivity
  • how to develop long-term, diversified financing strategies

This workshop is facilitated by the two developers of Microfin, and is based on the CGAP Handbook they authored, Business Planning and Financial Modeling for Microfinance Institutions. They have taught this course in 20 countries around the world, and it is one of the most recognized and attended courses in all of microfinance.

Agenda

Monday to Friday, 9:00 AM to 5:00 PM. Coffee, tea, and snacks will be provided daily. Hotels or other accommodation are the responsibility of each participant and are not included in the course fee.

Day 1

  • Overview of Business Planning: Participants will review and discuss the Business Planning framework. In particular, attention will be directed to the market-based approach of the framework.
  • Strategic Planning: This section will address the key steps of strategic planning – articulating the mission, identifying clients and markets, performing an environmental analysis, carrying out an institutional assessment, and developing an overall strategy.
  • Overview of Financial Management: We provide a brief overview of financial statements, the calculation of financial adjustments, and the key financial ratios used in the microfinance industry.

Day 2

  • Operational Planning and Introduction to Financial Modeling / Product Design: Over Days 2 through 5, we will apply the strategy developed on Day 1 to creating an operational plan and detailed financial projections, beginning with design of credit and savings products (loan amounts and terms by cycle, pricing, collateral, etc.). Small group exercises throughout will focus on applying a case study to the new version of the Microfin model.

Day 3

  • Establishing Marketing Channels: Operational planning continues with projecting the levels of activity for each credit and savings product, including growth strategies by branch, retention rates, and analysis of Microfin’s outputs and graphs.

Day 4

  • Determining Institutional Resources and Capacity: We will look at each aspect of institutional capacity (staffing, operating expenses, fixed assets), linking resources to credit and savings activity.

Day 5

  • Developing a Financing Strategy and Analyzing Projected Financial Statements and Ratios: We will look at designing a financing strategy by sources (income, grants, equity, debt) and by uses (operations, portfolio, and other assets). We will also review the overall financial projections
  • Advanced Microfin topics: We will cover advanced topics in Microfin, including sensitivity analysis, variance analysis, creation of additional graphs, etc.

Registration
Registration is limited and will be on a first-come, first-served basis. The cost is $1,350 per participant payable upon registration, or $1,250 if registration and payment are received by April 23. To register, please complete and return the attached form and we will send you payment information. (Note: for groups of 2 or more people from the same organization, we offer a discounted fee of $1,250, or $1,150 if registration and payment are received by April 23) NOTE: Hotel or other accommodations are the responsibility of each participant, and are not included in the course fee.

Course fee must be paid in full at the time of registration. We cannot reserve places in the course without receiving payment. Please refer to our refund policy at the end of the registration form.

NOTE: Laptop Computers: Participants will work on laptop computers during the course. It is not necessary for each participant to bring a laptop, because we will be working in groups of three. However, to help us in logistical planning, please indicate if you will be bringing a laptop computer.


Facilitators

Chuck Waterfield has 25 years experience in microfinance, having served as microenterprise director for MEDA and for CARE International. His current work as an independent consultant includes clients such as ACCION, SIDA, the Ford Foundation, CGAP, Opportunity International, and Aspen Institute. He is on the faculty of Columbia University School of International and Public Affairs and was formerly on the faculty of the Boulder Microfinance Training Program and Southern New Hampshire University’s Microenterprise Development Institute. In addition to Microfin and the Business Planning handbook, he has a broad range of products and publications including the SEEP FRAME Tool, the CARE Credit and Savings Sourcebook, GEMINI Technical Note on Designing for Financial Viability, and CGAP Handbook on Management Information Systems.

Tony Sheldon has worked as an independent consultant with microfinance institutions in Africa, Asia, Latin America and Eastern Europe since 1990, primarily in the areas of financial management and business planning. He has also worked with several networks and funders, including the Ford Foundation, the SEEP Network, ShoreBank International, Women’s World Banking, CGAP, and the World Bank. From 1997 to 2006 he was on the faculty of the Boulder Microfinance Training Program, and from 1999 to 2006 taught at Southern New Hampshire University’s Microenterprise Development Institute. He currently teaches at the Yale School of Management. In addition to the business planning Handbook, he is the author of WWB’s “Principles and Practices of Financial Management” and a co-author of SEEP’s “Financial Ratio Analysis of MFIs” and editor of the SEEP Practitioner Learning Program series on "Improving Efficiency".

Business Planning and Financial Projections with Microfin

Washington DC, 23-27 May 2011

REGISTRATION FORM

(Just copy and paste this information into an email, fill in the blanks, and send the email to Chuck Waterfield at: waterfield @ microfin.com)

Name

Institution

Address

Job Title:

Telephone:

Email:

I ___ will ____ will not be bringing a laptop computer

I ___ will ____ will not need an invitation letter in order to apply for a visa to the US

Payment of US$1,350.00 (payable to “MFI Solutions”), or $1,250 if registration and payment are received by April 23, must accompany or immediately follow this registration form in order to reserve a place in the workshop. (For groups of 2 or more from the same organization, the fee is $1,250, or $1,150 per person if paid by April 23). Payment may be made by wire transfer, check in US$, or in some cases by credit card. Please e-mail us for details prior to processing payment

Refund and Cancellation Policy: If you are unable to attend, you are free to send someone else in your place, but we would appreciate knowing in advance. Cancellations are subject to the following refund policy:

  • 90% if notice of cancellation is received at least 30 days in advance of the beginning of the course
  • 75% if notice of cancellation is received 21-29 days in advance
  • 50% if notice of cancellation is received 14-20 days in advance
  • 25% if notice of cancellation is received 7-13 days in advance
  • No refunds can be made if notice of cancellation is received less than 7 days before the beginning of the course.

Tuesday, March 8, 2011

Innovative approaches to financing the poor urban farmer: Lessons from Ghana and Nigeria

By Irene S. Egyir[1], Kemisola O. Adenegan, Adetola Adeoti [2] and Olufunke Cofie

The urban farmer usually accesses funds from informal sources such as family, friends, traders, money lenders and esusu operators. What these lenders offer has been insufficient; the farmers need to purchase several inputs to increase production and farm income. Innovative financing approaches are needed. Studies were carried out in Accra (Ghana) and Ibadan (Nigeria) to assess opportunities and bottlenecks within the formal financing institutions in the cities, and the demand for credit by farmers. The methodology used for the studies followed a five-step approach: a review of literature, stakeholder mapping, focus group discussions, key informant interviews and a validation workshop. In all 179 people were interviewed in Ghana and 150 in Nigeria.

The results of the studies showed that there are universal banking institutions, semi-formal savings and loans and credit unions, rural and community banks and financial NGOs in each of the cities. These institutions offer several financial products including savings, credit, insurance and money transfers. Their lending facilities operate on a save-before-credit model. However, the institutions studied indicated that they were free to develop tailor-made products to suit special groups of clients such as poor urban farmers.

The key bottleneck in developing a special product is the fear of default by the farmers. In Nigeria, two financial NGOs reported that in 2009, outstanding loans in default was worth N 200 million (US$ 1.3 million), while in Ghana, the mean default rate of 37 micro finance schemes was 29 percent. Other bottlenecks included: inadequate capital base, low capacity of finance institutions to implement social responsibility packages (e.g. free training programmes and subsidised credit), unfavourable policies by the Central Banks and poor market infrastructures.

Farmers “challenges” with repayment was also reported: unpredictable weather, leading to crop failure, high household dependency ratio and expenditure points, high interest rate, short repayment periods required by the institutions (usually 3 months) and low return on investments due to low sales or poor business management skills were noted. Farmers expressed their financial needs in terms of loan amounts and preferred interest rates. The range of loan amounts was between US$ 140.00 and US$ 700.00. The tolerable interest rate per annum was 40 percent (about 3.33% per month - see Figure 1). Farmers, particularly in Nigeria demanded for disbursements of credit in kind, example seeds and agro chemicals.



Source: Ghana and Nigeria FStT finance studies (2009)

To facilitate easier access by poor urban farmers to formal financial support, an integrated financing approach is recommended. Based on our research findings we recommend four point: (1) Financial institutions should form a partnership with urban farmer cooperatives and develop a special product with low interest rate per annum (i.e. 3%), (2) Farmers should diversify their income generating activities and learn the principles of loan use and repayment (3) Local government should improve the conditions of market infrastructure such as road conditions in the cities and (4) Stakeholders involved in group formation and dynamics should increase their support for training urban agricultural producers.



[1] Lecturer, Department of Agricultural Economics and Agribusiness, University of Ghana, Legon.

[2] Senior Lecturer, Department of Agricultural Economics, University of Ibadan, Nigeria.