A technical guide

Abstract

This appraisal guide and its companion resource manual incorporate the latest microfinance knowledge and best practices to form a comprehensive guide that analysts can use to evaluate microfinance institutions (MFIs). This guide is primarily for funders and their qualified consultants who analyze the MFIs. This guide is organized in the form of an outline of a complete appraisal report. A complete report covers seven areas: Overview-summarizes the MFI's vision and mission, organizational strengths and weaknesses, and macroeconomic, political, and other external factors. Institution-describes the MFI's ownership and governance, organizational structure, regulation and supervision, management, external relationships, human resource management, information and communications technology, information availability and quality, internal controls, and external auditing. Products-analyze the MFI's voluntary savings, lending, and financial and non-financial products. Social performance-assesses how well the MFI translates its social goals into practice, looking at systems, outreach, and potential for achieving impact. Loan portfolio quality-reviews how the MFI measures, monitors, and manages its loan portfolio, including delinquency and write-offs. Financial performance and risk management-analyzes the MFI's financial performance, risk management, and financial ratios. Business planning-evaluates the MFI's strategic and business planning processes and financial projections.