1 / 13

Partner Microfinance Foundation Weathering the storm Case Study from Bosnia and Herzegovina

Partner Microfinance Foundation Weathering the storm Case Study from Bosnia and Herzegovina. Partner Microcredit Foundation Basic indicators as of Sept 30th 2011. The main reasons that caused the crises in MF sector:. Global financial crisis Increasing unemployement rate

yered
Download Presentation

Partner Microfinance Foundation Weathering the storm Case Study from Bosnia and Herzegovina

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Partner Microfinance Foundation Weathering the storm Case Study from Bosnia and Herzegovina

  2. Partner Microcredit Foundation Basic indicators as of Sept 30th 2011

  3. The main reasons that caused the crises in MF sector: Global financial crisis Increasing unemployement rate Bad political situation and social tensions Market limitations Strong competition Poor response to the crisis from the Government Strong banking lobby

  4. Clients’ over-indebtedness Insufficient loan appraisal process Highly competitive microfinance sector in B&H Flawed incentive systems for Loan Officers Lack of information on credit history (before CLR) Clients multiple lending High capital inflow to the financial sector Lack of industry code of conduct Fast institutional growth (profit-oriented) Factors from MF industry

  5. Deterioration in portfolio quality as result of the financial crisis

  6. The effect of the crisis on Partner MCF: • Compromised quality of portfolio • The increase in the level of total debt write-offs • The lack og demand • General sense of insecurity among employees

  7. Actions taken by Partner: • Social responsibility • Financial education of clients • Inovative approach for lending (Mercy Corps projects) • Innovative loan products (youth, farmers, etc). • ISO standards (ISO 9001, 27001, 31000, 10000, etc)

  8. Privacy of client data Avoidance of over-indebtedness Transparent and Responsible pricing Appropriate collections practices Ethical staff behavior Mechanisms for redress of grievances Partner’s response in client’s protection: The six principles

  9. Newproducts and services (Youth loan, Fruity loan, Insurance loan) Market leader in clients’ protection Rigorous analysis and approval Good image, clients’ trust Constant market survey Sophisticated internal systems Client oriented management Organizational: Centralization Separation of sales, approval and loan collection units Monitoring Separating sales, approval and collection of loans Employees’ satisfaction Partner’s response to the crisis:

  10. Improvement in portfolio quality as result of taken actions

  11. Achieving social performance objectives leads to financial gain, which is necessary in order to continue providing social benefits to our clients. Financial or social performance objectives?

  12. Recommendations: • Limit credit exposure per client • Reduce internaly cross-borrowing from multiple institutions • Strengthen loan appraisal and monitoring • Develop industry-wide standards of conduct • Investors should include the assessment of the compliance with the standards of the code of conduct into due diligence • Harmonize risk classification (A-E) methodology in the county • Clearly mark restructured loans • Conduct trend analysis of comprehensive CRK data

  13. Selma Jahic, Assistant Director for Marketingemail: selma@partner.ba

More Related