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Discussing validation methodology, data collection, and analysis for small business impact metrics. Proposing a sustainable framework matrix for financial, economic, environmental, and social indicators. Emphasis on data analysis findings and replicability.
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Why the Metrics A goal set - touching 1 billion lives by 2020 Set up 5 action tracks to deliver by 2015 The 5th Action Track – “Impact Metrics” Slide 1
What our customers say... Slide 2
Identify and validate impact metrics of small businesses Discuss and agree on a globally replicable metrics Objectives Slide 6
Framework for Sustainable Development Indicators Available Indicators Proposed Framework for Sustainability Indicators of Bank Finance Indicator Validation – The Methodology Data Collection Method Method of Data Analysis Analysis of the Findings Validation of Financial, Economic, Environmental, Social and Market Development Indicators Validation of Effectiveness Indicators of BRAC Bank Expected Outcomes Slide 7
Available Indicators for Sustainable Development Slide 8
Focused on macro economy, rather than organizational level Differential framework, not concrete indicators Importance on Development sector, not Financial sector Unmanageable number of indicators Social dimension of sustainability less emphasized Available Indicators for Sustainable Development Slide 9
Proposed Framework (Matrix – Financial Indicators) Slide 10
Proposed Framework (Matrix – Financial Indicators) Slide 11
Proposed Framework (Matrix – Financial Indicators) Slide 12
Proposed Framework (Matrix – Economic Indicators) Slide 13
Proposed Framework (Matrix – Economic Indicators) Slide 14
Proposed Framework (Matrix – Economic Indicators) Slide 15
Proposed Framework (Matrix – Environmental Indicators) Slide 16
Proposed Framework (Matrix – Social Indicators) Slide 17
Proposed Framework Slide 18
Primary data on SME borrowers of BRAC Bank Randomly selected 21 SME unit offices (5%), and 25 enterprises for each Secondary data collected from SME Banking of BRAC Bank Some information collected from loan application forms Conducted survey on all the selected samples Conducted interviews on all the selected samples Indicator Validation (Data Collection Method) Slide 19
Technique used – Propensity Score Matching For some indicators “Mean or proportional differences test” were used Indicator Validation (Data Analysis Method) Slide 20
Analysis of the Findings Slide 21
Analysis of the Findings Slide 22
Analysis of the Findings Slide 23
Analysis of the Findings Slide 24
Analysis of the Findings Slide 25
Three indicators – backward linkage, forward linkage and expansion of similar business. Borrowers are asked to respond to three statements since borrowing from BRAC Bank. Based on the perceptions of the borrowers, the growth rate of these three indicators are estimated below. Analysis of the Findings Slide 26
Analysis of the Findings (Summary) Slide 27
Until this study, impact of SME Credit on enterprise level has not been carried out. BRAC Bank SME credit program has positive impact on the borrowers by and large. Bank may influence environment positively through appropriate lending policy, strongly discouraging financing enterprises that directly affect environment. Indicators are found to be comprehensive The indicators have proven to be valid - significantly differentiate performance of repeat borrowers (participants) from the new borrowers (control). Possible to reduce number of indicators through factor analysis and developing some indices which may involve more time for estimation. We believe that the metrics are replicable. Conclusion Slide 28
Can we arrive at a globally accepted single index? To measure impact by the member banks To use as a criteria to include other banks in the alliance Next Steps & Discussion Slide 29
Thank YouThe Final Report will be available after June 1, 2011, upon mailing to <Syed Mahbubur Rahman>mahbubur@bracbank.com Slide 30