Banco Si

Filed in: Financial Services | Latin America & Caribbean

Banco Si is a fictional Peruvian microfinance institution offering microenterprise and household loans, mostly to women.   Banco Si has always strongly encouraged deposits, and typically expects potential borrowers to hold deposit accounts for a time before taking their first loan.  The MFI operates in both urban and rural markets, and is beginning to experiment with micro-insurance. Two years ago they introduced a life insurance product, and they are now rolling out a livestock insurance product to their rural customers.  Banco Si is committed to the betterment of the communities they work in, and offers extensive training, education, and capacity building opportunities.  The effective interest rate, at 40-45% (including all costs and fees), is high for the region but the company feels that it’s justified based upon the quality of service each customer receives.

Banco Si maintains a profile on the MIX Market and also regularly collects other social performance information. These data collection and reporting practices are consistent with those reflected in IRIS.

Sample Report: 

Report Sections:

Organization Description
Product Description
Financial Performance
Operational Impact
Product Impact
 

This report represents an example of how an organization might produce a performance report using the IRIS framework. The data and the organization in the report are fictional.

 
Banco Si
Consolidated IRIS Report (FY 2009)
(Currency Values in US Dollars)
 

Organization Description

Name of Organization Banco Si
Year Founded 2001
Type of Financial Institution Non-Banking Financial Institution (NBFI)/Non-Banking Financial Corporation (NBFC)
Customer Model B2C
Mission Statement To Provide Financial Services to the Urban and Rural Poor, building financial literacy and pride among Women. 
Social Impact Objectives - Access to financial services
- Equality and empowerment
- Income/productivity growth

Product Description 

Microenterprise Credit
Product/Service Type Financial Services
Product/Service Detailed Type Microenterprise Financing
Product/Service Description Microcredit product designed to spur microenterprise generation
Client Type: Individual/Household Individual
Target Beneficiary Demographic Women
Target Beneficiary Socioeconomics - Poor
- Very Poor
Target Beneficiary Location - Rural
- Urban
Client Locations Peru
Microfinance Delivery Methodology Solidarity Group Lending; Individual Lending 
Interest Rate- Method Declining balance method 
Microfinance- Enterprise Services Offered - Business Development Service
- Enterprise Skills Development 
Other Financial Services Offered

- Savings Facilitation Services
- Mobile Banking Services
- Remittance Services
Non-financial Services Offered - Enterprise Services
- Female Empowerment
- Education Services
- Health Services
- Other
Microfinance- Educational Services Offered - Child and Youth Education
- Basic Health / Nutrition Education
- Financial Literacy 
Microfinance- Health Services Offered - Basic Medical Services 
Microfinance- Women Empowerment Services Offered - Women's Rights Education / Gender Issues (training for men and women)
- Women's Leadership Training
Household Financing
Product/Service Type Financial Services
Product/Service Detailed Type Household Needs/Consumption Financing
Product/Service Description Microcredit product designed for household income smoothing
Client Type: Individual/Household Individual
Target Beneficiary Demographic Women
Target Beneficiary Socioeconomics - Poor
- Very Poor
Target Beneficiary Location - Rural
- Urban
Client Locations Peru
Microfinance Delivery Methodology Solidarity Group Lending
Interest Rate- Method Declining balance method
Other Financial Services Offered - Savings Facilitation Services
- Mobile Banking Services
- Remittance Services
Non-financial Services Offered - Enterprise Services
- Female Empowerment
- Education Services
- Health Services
- Other
Microfinance- Educational Services Offered - Child and Youth Education
- Basic Health / Nutrition Education
- Financial Literacy 
Microfinance- Health Services Offered - Basic Medical Services 
Microfinance- Women Empowerment Services Offered - Women's Rights Education / Gender Issues (training for men and women)
- Women's Leadership Training
Voluntary Deposit Accounts
Product/Service Type Financial Services
Product/Service Detailed Type Voluntary Demand Deposits
Product/Service Description Voluntary Deposit Accounts
Client Type: Individual/Household Individual
Target Beneficiary Demographic Women
Target Beneficiary Socioeconomics - Poor
- Very Poor
Target Beneficiary Location - Rural
- Urban
Client Locations Peru
Other Financial Services Offered - Savings Facilitation Services
- Mobile Banking Services
- Remittance Services
Non-financial Services Offered - Enterprise Services
- Female Empowerment
- Education Services
- Health Services
- Other
Microfinance- Educational Services Offered - Child and Youth Education
- Basic Health / Nutrition Education
- Financial Literacy 
Microfinance- Health Services Offered Basic Medical Services 
Microfinance- Women Empowerment Services Offered - Women's Rights Education / Gender Issues (training for men and women)
- Women's Leadership Training
Livestock Insurance
Product/Service Type Financial Services
Product/Service Detailed Type Insurance - Livestock/Agriculture Insurance
Product/Service Description Livestock Insurance
Client Type: Individual/Household Individual
Target Beneficiary Location Rural
Client Locations Peru
Microfinance- Health Services Offered Basic Medical Services 
Life Insurance
Product/Service Type Financial Services
Product/Service Detailed Type Insurance - Life Insurance
Product/Service Description Life Insurance
Client Type: Individual/Household Individual
Target Beneficiary Socioeconomics - Low Income
- Poor
- Very Poor
Target Beneficiary Location - Rural
- Urban
Client Locations Peru
Microfinance- Health Services Offered Basic Medical Services 

Operational Impact

Governance and Policies
Board of Directors 9
Board of Directors: Meeting Frequency Annually
Board of Directors: Independence 3
Code of Ethics Yes
Conflict of Interest Policy Yes
Fair Hiring / Recruiting Practices -Race
-Color
-Gender
-Age
-Ethnic origin
Fair Career Advancement Practices  -Race
-Color
-Gender
-Age
-Ethnic origin
Fair Compensation Practices -Race
-Color
-Gender
-Age
-Ethnic origin
Sexual Harassment Policy Yes
Employment Benefits - Health insurance
- Life insurance
Healthcare Benefits Premium Covered 100%
Market Research on Clients Yes
Market Research on Clients: Research Process - Market research for development of new products
- Client satisfaction assessment 
Market Research on Clients: Research Frequency Occasionally from time-to-time 
Client Exit Surveys Regularly
Social Performance Management Training Yes
Financial Services Areas of Training - Acceptable practices of payment collection
- Communications with clients about product pricing, terms, and conditions
- Gender sensitivity
- Over-indebtedness prevention
- Poverty measurement
Social Performance Incentives Yes
Social Performance Incentives: Incentive Areas - Ability to attract new clients from target market
- Outreach to women
- Outreach of remote rural communities
- Portfolio quality
- Client Retention/Drop-out rates
Social Performance Incentives: Participants - Middle Managers
- Loan Officers/Insurance Agents
Social Responsibility to Microfinance Clients

- A mechanism to handle clients' complaints is in place, has dedicated staff resources, and is actively used (suggestion boxes alone are generally not adequate).

- Acceptable and unacceptable debt collection practices are clearly spelled out in a code of ethics, book of staff rules, or debt collection manual.

- All staff are trained to communicate effectively with clients, ensuring that they understand the products, the terms of the contract, and clients' rights and obligations.

- Prices, terms, and conditions of all financial products are fully disclosed to the client prior to sale. Information provided includes interest charges, insurance premiums, minimum balances , all fees, penalties, linked products, third party fees, and whether those can change over time.

- The loan approval process requires an evaluation of borrower repayment capacity and loan affordability.
Employees
Full Time Employees 531
Full Time Employees: Female 385
Full-time Employees: Managers 68
Full-time Employees: Female Managers 31
Loan Officers Employed 247
Loan Officers Employed: Female 133
Full-time Wages 6,300,000
Full-time Wages: Females 4,400,000
Full-time Wages: Management  1,850,000
Full-time Wages: Female Management  810
Loan Officers Wages 2,300,000

Financial Performance

Income Statment
Earned Revenue 21,500,000
Financial Revenue 19,800,000
Interest Expense 4,950,000
Impairment Loss 920,000
Financial Expense 5,910,000
Personnel Expense 6,450,000
Selling, General, and Administration Expense 3,650,000
Depreciation and Amortization Expense 300,000
Operating Expense 10,400,000
Taxes 1,520,000
Net Income Before Donations 3,670,000
Contributed Revenue 450,000
Net Income 4,120,000
Balance Sheet
Cash and Cash Equivalents- Period End  5,080,000
Impairment Loss Allowance 1,740,000
Loans Receivable Net 47,280,000
Financial Assets 60,100,000
Total Assets 68,400,000
Total Deposits 8,300,000
Loans Payable 36,800,000
Financial Liabilities 48,200,000
Total Liabilities 55,120,000
Equity or net assets 13,280,000
Ratios Concepts and Calculations
Deposits to Loans 17%
Microfinance Operating Efficiency 21%
Microfinance Personnel Efficiency 13%
Non Performing Loans (Portfolio at Risk)- 30 days 3,300,240
Non Performing Loans (Portfolio at Risk)- 90 days 2,591,040
Loan Write-offs 1,981,128
Return on Assets (ROA) 5%
Return on Equity (ROE) 28%

Product Impact

  Microenterprise Credit Household Financing Voluntary Deposit Accounts Livestock Insurance Life Insurance Organization Total
Loan Portfolio Outstanding- Value of Investments 43,400,000 3,880,000       47,280,000
Total Voluntary Savings Accounts     129,653     129,653
Total Value of Voluntary Savings Accounts     8,300,000     8,300,000
Client Individuals 90,219 21,254 129,653 251 721 129,802
Clients Individuals: Female 62,156 20,852 96,312 189 425 96,414
Client Individuals: Very Poor           19,470
Clients Individuals: Poor           97,352
Client Individuals: Rural           77,881
Client Individuals: Urban           51,921
New Client Individuals 17,845 12,125 45,826 251 524 45,976
Loan Insurance- Number of Clients 87,158 423       1800
Communities Served 173 173 173 12 34 173
Effective Interest Rate 40.5% 45%        
Client Retention Rate           74%
Group-based Training           21,521
Technical Assistance           1,526
Active Borrowers per Loan Officer           452