QUESTION 1

You have been recently engaged as the Chief Executive Officer (CEO) of a microfinance institution (MFI). Produce a presentation to the directors of the microfinance institution(MFI) on the financial health and performance of the institution. You found the need to explain the relevant concepts used for the evaluation of microfinance institutions(MFIs)in order to facilitate the appreciation of the issues by your audience. The content of the presentation shall form the basis of the strategic plan currently being considered.

You are required to:

a) Provide an assessment of the financial health and performance of the microfinance institution(MFI) using the data extracts from income statements and balance sheet of the microfinance institution (MFI) that have assigned to you.

b) Make recommendations based on your analysis which will be used for the crafting of the strategic plan for the MFI.

?Use the data provided in the attachment to generate your answer

?

Other Liabilities ( Schedule G) 550,563.54 Total Liabilities 2,662,291.61 Shareholders' Funds and Total Liabilities 8,132,332.20 Net Difference (A-B) Short Term Investments (4+5+7) 600,287.06 Earning Assets (3+4+5+7+8) 7,029,666.56 Interest Bearing Liability (15+16) 2,111,728.07 Percentage Share of Total Assets Percentage Share of Total Loan & Advances Percentage Share of Total Short Term Investment Percentage Share of Total Deposits Percentage Share of Total Borrowings Percentage Share of Total Share Capital Percentage Share of Total Reserves Advances to Deposits Ratio 350.99% Advances to Borrowings Ratio 2296.62% Short Term Investments To Deposits Ratio 32.77% Short Term Investments To Borrowings Ratio 214.43% Advances to Total Share Capital Ratio 308.22% Short Term Investments To Total Share Capital Ratio 28.78% Advances To Total Assets Ratio 79.06% Short Term Investments To Total Assets Ratio 7.38% CAR (%) 77% NPL 0.00INCOME / EXPENSE C Interest on loans assets received (Schedule A) 154,633.97 Interest on investments received (Schedule B) 142.30 Interest income (1+2) 154,776.27 Interest expense (Schedule C) 22,893.50 Net interest income (3-4) 131,882.77 Other operating income (Schedule D) 27,267.48 Total Operating Income (5+6) 159,150.25 Operating cost (Schedule E) 115,281.56 Net Operating Income (7-8) 43,868.69 Risk provisions (including charge offs) 0.00 Operaing profit/loss (9-10) 43,868.69 Non-operating income/loss (Schedule F) 0.00 Total income (7+12) 159,150.25 Profit before tax/operating loss (11+12) 43,868.69 Provision for tax 0.00 Net Income (14-15) 43,868.69ASSETS Cash on hand 52,175.90 Balances in current accounts with bank/Fin Inst ( Schedule A) 589,128.46 Balances in savings account with banks/Fin inst 0.00 Money on call with banks/fin inst 0.00 Placement with banks/fin inst (Schedule B) 600,287.06 Cash and Short term funds ( sum 1 to 5) 1,241,591.42 GOG /BOG Securities ( Schedule B) 0.00 Loans and Advances (net) ( Schedule C) 6,429,379.50 Other Assets (Schedule D) 30,369.96 Property, Plant and Equipment (net) 430,991.32 Total Assets 8,132,332.20 CAPITAL AND LIABILITIES Paid up capital 2,086,000.00 Redeemable Preference Shares 0.00 Reserves 3,384,040.59 OWN FUNDS/SHAREHOLDERS' FUNDS 5,470,040.59 Borrowings ( Schedule E) 279,950.00 Deposits from the public ( Schedule F) 1,831,778.07