Ghana 2014 Course Descriptions
Phone: (603) 862-0764
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The Carsey Institute at the University of New Hampshire
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Durham, NH 03824
Ghana 2014 Course Descriptions
Five day full-week course (repeated in second week March 17 - 21)
Prerequisite: Begins with Principles of Microfinance Online Pre-course
Facilitators: Aba Amissah Quainoo, Gordon S. Agezo, Kwabena Owusu Mensah, and Ishmael Kwesi Otchere
This course is intended for persons actively involved in microfinance operational activities including managers, staff, and board members of microfinance companies and financial NGOs that are in the process of being licensed and regulated by the central bank. It provides critical knowledge on key principles and practices that are necessary for the professional management of a microfinance institution for sustainability and compliance with prudent principles which meet regulatory norms and standards. The course modules are selected from the standardized training manuals of Ghana’s Capacity Building Fund so as to provide a one-week overview of the most important aspects of topics that would otherwise require several weeks of separate training sessions.
Primary emphasis is placed on key operational areas in microfinance practice, financial and credit management and includes risk management and internal controls for effective monitoring of performance within the framework of modern computerized management information systems (MIS).
Because people’s background in and definitions of microfinance may differ, the classroom course will be preceded by an online module in basic Microfinance Principles and Practices, to ensure that participants have a common language and understanding of microfinance.
By the end of the course, participants are expected to:
- Have a basic understanding of the key principles for effective, professional management of a regulated microfinance institution
- Be able to analyze the performance of the institution and its loan portfolio based on standard indicators and ratios
- Know what key issues have to be addressed as part of the process of transformation to a licensed, regulated financial institution
- Have a practical grasp of key tools for effective management of a microfinance institution and its staff
- Microfinance Principles and Practice
- Concepts and best practices
- Microfinance product development and management
- Microfinance operations, planning and monitoring through various tools eg. SEEP & MIX Market tools
- Financial Management
- Key financial performance ratios
- Monitoring and analysis for decision making
- Credit Management
- Credit cycle and credit risk management
- Key performance management ratios, monitoring, and analysis
- Management Information Systems (MIS)/ICT
- Computer appreciation for effective MIS and decesion-making
- ICT in microfinance risk management
- Reporting systems including prudential reporting requirements of Central Bank
- Risk Management and Internal Controls
- Risk Management in microfinance operations
- Internal controls in key functional areas, compliance and fraud control
Five full-day sessions, including a half-day field visit on Thursday
Facilitator: Ernest Senyo Dzandu
Risk and risk management are popular topics within the business world generally, and the microfinance sector is no exception. The sector has developed rapidly in the past twenty-five years to meet the growing demand for variety of financial services. As growth and complexity increase, so do the risks and challenges. This track is designed to provide the participant with an overall understanding of risk and practical strategies for risk management on a continuous basis. It will identify the major risks faced by MFIs and provide useful insights on how to mitigate these threats to the institutions by discussing the development and implementation of appropriate strategies, processes, and controls.
Specific modules to be presented include: overview of risk and risk management; the role of board governance, internal controls, and internal audits in risk management; integrating all stakeholders including clients in the risk management process; financial risk management; risk management in computerized environments; financial literacy and consumer protection as tools for risk management; and growth and change management in the context of risk management. Additional topics to be addressed in the context of risk management are fraud prevention, competition, and client retention. In addition to facilitator presentations, two Guest Practitioners, one each from a regulated and unregulated MFI, will make presentations on risk management in their institutions. Visits will be made to selected MFIs to learn first-hand practices relating to risk management
By the end of the course, participants will:
- Gain a general understanding of the risks facing microfinance institutions;
- Identify the role of board governance, internal controls, and internal audits in the risk management framework;
- Obtain insight into how to instill a risk management culture at every level of the MFI;
- Implement risk management framework in the MFI;
- Establish linkage between effective risk management on one hand and MFI’s profitability and sustainability on the other;
- Appreciate a market led, customer-oriented approach to providing products and services in order to achieve the MFIs' objectives;
- Gain practical understanding of different structures used for risk management in regulated and unregulated MFIs;
- Present an approach for the design of an effective system of internal controls through preventive controls, including people, paper (reporting), and money with a focus on risk management.
Five full-day sessions
Facilitator: Richard Pelrine
- Theory and tools for developing a practical strategy and products for financing agriculture, including:
- An overview of product development
- Tools for measuring benefits and costs to the lender and the client
- Tools for properly costing all financial and operational costs for offering a loan product
- Analytical tools for choosing the best bankable enterprises from the perspectives of profit, risk, market size, growth potential, ease of financing, etc.
- Practical Research (either classroom or field based), including:
- Tools for collecting key data for defining lending opportunities
- Data collection from input suppliers, producers, transporters, processors, wholesalers, etc.
- Consolidating data into spreadsheets
- Using Microsoft Excel™ to analyze the data to identify opportunities and risks at each value chain segment, verify that the value chain is functioning and capable of growth, and estimate the size of the market potential for finance.
- Develop a functional understanding of the features, strengths, and weaknesses of various loan products and strategic approaches to lending and recovery, including:
- Working capital loans
- Term financing and leasing
- Savings and Credit hybrid products and strategies
- Structured Trade Financing (nowadays often called ‘Value Chain Financing’)
- Learn the analytical and synthetic skills to develop an actual product, including:
- Understanding how to match the tenure of new assets to existing liabilities and/or how to refinance assets
- Understanding the human and physical resource requirements for financing agriculture and accounting for their costs in the product pricing
- Understanding risk management strategies for financing agriculture and accounting for their costs in the product pricing
- Understanding the unique policies and procedures needed for financing agriculture and accounting for their costs in the product pricing
- Understanding basic rules for balancing the lending portfolio to neutralize risk
- Understanding basic rules for institution-wide cash flow planning
The objective of the course is to deepen the participants’ knowledge and understanding of the delivery and recovery of agribusiness finance based on a foundation of understanding value chains and value chain financing. The participants are expected to acquire practical skills and internalize relevant theory to:
- Raise critical questions regarding an agricultural lending opportunity
- Use practical tools to research the answers to those questions
- Become aware of the features and benefits of multiple options for financing agriculture
- Actually produce prototype products that are profitable and risk neutral for financing actual agricultural lending opportunities
To realize these objectives, the course is supported by a manual covering the following topics:
- Review of Basic Financial Theory Underpinning Agribusiness Lending Operations
- Financial Demand Analysis and Qualified Financial Demand Analysis
- Selecting Bankable Agribusinesses
- Analysis of Internal Capacity to Supply a Loan Product
- Initial Planning of Product Cash Flows
- Risk Mitigation and the Affiliated Variable Costs
- Loan Procedures and Costs
- Product Costing and Interest Rate Determination
- Product Promotional Strategy
Managers of Financial Institutions; Graduate Students in Finance, Agribusiness, and Agribusiness Finance; Financial Sector Development Professionals
Five full-day sessions, including a field visit to VSLA groups on Tuesday
Facilitator: Andrew Mnjama
It is becoming generally accepted that conventional microfinance approaches are unable to reach the majority of the rural poor (particularly in Africa) with a suite of appropriate financial services. This is owing to cost and the relatively limited debt capacity of the poorest. In addition, there is an increasing awareness of the primary importance of savings services, which most MFIs do not provide.
In the last ten years, this gap is increasingly filled by community-managed microfinance groups (known generically as savings groups), in which members mobilise and manage their own savings, investing this money in a loan fund from which they can borrow in amounts as small as $1. This approach is proving to be low cost, highly sustainable, profitable for the member-owners, and achieving significant scale. It is also promoted by most of the major international development agencies.
The objectives of the course are to:
- Present the theoretical background to community-managed microfinance
- Visit a savings group and witness a savings and credit meeting
- Be exposed to the methodological approaches and training tools employed by the major implementing organisations
- Receive an introduction to the most widely-used management information system
- Offer approaches to evaluation and the results of impact studies
- Be introduced to the most successful approaches to programme design
Week Two - Monday, March 17, to Friday, March 21
Five full-day sessions
Facilitator: Boubacar Diallo
In their pursuit of profitability, many MFIs across Africa have subordinated their original social goals and objectives to concentrate more specifically on financial ones. While usually not intentional, it has led to MFIs designing their products and selecting their clients in ways that seek to minimize risk and maximize profits. MFIs have thus been able to achieve financial sustainability in impressive numbers. In doing so, however, they have often systematically excluded poor and marginalized people—precisely the segment of the population that many of the earliest microfinance institutions were created to serve. Furthermore, even though most of the microfinance institutions (if not all) have an implicit or explicit social mission, they basically assess their own performance in focusing only on financial and economic indicators and ignoring the social ones. The majority of the MFIs do not define, measure, and monitor the social outcomes that are critical to the fulfillment of their mission. Therefore, they do not manage their social performance.
Over the last few years, the industry and microfinance stakeholders have begun to recognize the occurrence of the “mission drift” and/or the gap in global performance management. Thus, an increasing number of MFIs and microfinance national associations across Africa have become more interested in learning about social performance management (SPM) practices in order to address these issues in a systematic manner.
The development of strategic plans usually takes a lot of time, effort, and money in many organizations. Once they complete the planning process, most organizations struggle to execute their plans and therefore fail to achieve their strategic objectives and vision. In most cases, it is like the development of the plan is much more important that its implementation. The literature indicates that only 10 percent of the organizations execute their strategies for many reasons (miscommunication of the strategy, lack of clarity in objectives, problems in the cascading process, disconnection between the strategic priorities and the budgeting process, etc.). When developing their strategic objectives, a huge number of organizations only focus on financial and/or social outcomes, ignoring the quality of processes and the motivation and competencies of the staff and culture that determine the long-term success of any organization.
The use of Balanced Scorecard system can help overcome these key issues in strategic management.
This week-long course will provide participants with an overview of the social performance (SP) and social performance management (SPM) concept and tools and equip them with a proven approach to successfully undertake a social performance management project within their institution. It will further equip them with a simple approach to implement the Balanced Scorecard (BSC) system.
By the end of this course, participants will have:
- Analyzed the concept of BSC
- Developed a plan to use BSC in their organization
- Clarified their organizational mission
- Practiced the development of strategic objectives and strategic initiatives
- Practiced the process of defining lead and lag indicators
- Discussed the definition and the importance of SP and SPM
- Described and analyzed the components of SPM
- Practiced the process of translating the mission into social goals and SMART Objectives
- Practiced the process of defining of social indicators and identified the possible sources of information for the indicators
- Practiced performance management audit
- Practiced how to use the PPI tool to determine the poverty profile of a group of clients
This week long course is divided into two modules. The first deals with Credit Risk Management and the second Delinquency Management for Microfinance Sustainability.
Facilitator: Ernest Senyo Dzandu
Module One: Credit Risk Management
MFIs as part of their business extend credit to individuals and households. Over the years the MFI business landscape has changed with increased competition, development of new products by some of the institutions and changes in customer profile. With these changes, there is increased chance that MFIs may not receive the money they have extended.
The course in Credit Risk Management builds on the course in general risk management. It is structured to provide a deepened understanding of the concept of credit risk and mechanisms for managing credit risk ensuring that MFI objectives including profitability and sustainability are achieved. Specific areas that will be discussed include the concept of credit risk and its interaction with other risk types; symptoms exhibited by institutions that face the threat of credit risk; tools and techniques for assessing credit risk; credit risk prevention; credit risk control and credit risk evaluation. Other areas of focus will include using technology as a tool for credit risk management and entrenching credit risk management culture in the MFI.
On completion of the course participants will:
- Deepen their understanding of the concept of credit risk, credit risk management and credit risk interaction with other risks;
- Acquire the requisite skills for assessing status of credit risk;
- Adopt the requisite strategies for setting up and implementing credit risk management framework for the MFI;
- Describe and institute a market led and customer responsive approach to credit risk management;
- Obtain insight into how to instill credit risk management culture at every level of the MFI;
- Gain practical understanding of different structures that are considered for credit risk management for regulated MFIs
- Present an approach for the design of an effective system of internal controls through preventive controls, including people, paper (reporting), and money with a focus on risk management
Module Two: Delinquency Management for Microfinance Institutions
The loan portfolio is the heart of the MFI and it is mainly the biggest chunk of the MFI's earning assets. Unfortunately, the loan portfolio only receives the needed attention when it is getting out of hand. Over the years MFIs have benefitted from grants and other concessionary loans and have not paid critical attention to the "loan portfolio". This position has changed significantly and a lot of MFIs have to borrow and mobilize savings and investments for purposes of on lending. The systems in most MFIs for ensuring the quality of the loan portfolio in most of the institutions remain inadequate to support the growing needs of the MFI. Most institutions have lost a chunk of their portfolios long before attention gets to it, thus making efforts to recover very difficult. As a result profitability and eventual financial sustainability remain unattainable for affected MFIs.
The course in Delinquency Management for Microfinance Sustainability is structured to address the current challenges and gaps faced by MFIs in delinquency management which is a strong basis for achieving sustainability. The course will provide a deepened understanding of the concept of sustainability and the sustainability equation; the foundation of portfolio management which comprises clear market and product definition; the loan portfolio as the prized earning asset of the MFI; assessing portfolio quality; delinquency management and implications for sustainability, root causes of delinquency, cost of delinquency and managing the process; instituting preventive and detective controls; implementing corrective control measures and use of technology in the overall delinquency management process; implementing a culture of zero tolerance for delinquency and using delinquency management to enhance sustainability. Practical and real business cases will be used throughout the course and participants will be encouraged to develop strategies to address the deficiencies identified from the cases.
On completion of the course participants will among others:
- Deepen understanding of the concept of sustainability and its linkage to delinquency;
- Identify and analyse the root causes of delinquency;
- Appreciate the costs of delinquency to the institution;
- Acquire tools and techniques for instituting preventive and detective controls for effective portfolio management;
- Identify the building blocks for developing institutional action plan to recover from delinquency
Five full-day sessions
Prerequisite: Begins with online Financial Refresher Pre-course
Facilitator: Kadry Furany
This course will teach participants how to report and analyze the performance trend of microfinance institutions/projects through the effective utilization of reporting tools and financial performance ratios in compliance with internationally acceptable Financial Reporting Standards for MFIs. While participants should have a basic understanding of accounting and the interpretation of financial statements, the course will provide a basic overview of these concepts before entering into the performance analysis. The course will introduce the concepts of analysis to the participants through comprehensive exercises using a basic financial ratios framework and then introduce several more complex types of analysis frameworks. The course is very rich with case studies, group exercises, and best/better practices that will help participants understand implications of decisions/directions of MFIs. The course is designed to be very participatory using high standard adult education techniques. The course will introduce participants to a computerized tool that is highly recommended for standard MFI reporting and performance analysis.
Financial analysis is a science and an art, this course is designed to address the science and art of analysis for managers, board of directors, analysts of MFIs and regulators who oversee MFIs in their country. The course will refresh and teach new skills on how to assess and analyze the performance trend of microfinance institutions. It demystifies financial statements and teach participants the effective utilization of financial performance ratios.
While participants should have a basic understanding of financial statements, the course will provide a sufficient overview before entering into the performance analysis. This course is very rich with case studies, group exercises, and best/better practices that will help participants understand implications of decisions/directions of MFIs. it is designed to be very participatory using high standard adult education techniques. Before the end of the course, participations will be introduced and trained to use a handy electronic/computer tool (FRAME), which is used widely in the MF industry for performance and trend analysis.
Five full-day sessions
Facilitator: Andrew Mnjama
The VSL Associates Excel-based MIS is the most widely used in the industry and has been through 4 generations of development. But based as it is on an Excel worksheet it has a number of practical limitations and in the last year VSL Associates, with support from the Gates Foundation and MasterCard Foundation, has developed a completely new internet-based MIS, embedded in the SAVIX website, using similar bandwidth as Hotmail.
The new MIS has the following characteristics:
It is web-server based, meaning that data can be entered at any internet enabled computer in any location and will accept simultanoues data entry from multiple locations and users. It will also accept data from mobile devices through the use of an application programming interface (API).
- New upgrades to the MIS are automatic and no longer require importation of old data
- Data and software are unaffected by viruses
- It allows projects to post directly to the SAVIX, without being part of a facilitating agency network (one of the major limitations of the Excel-based version)
- Error correction takes place in real time and illogical data cannot be entered into the system, while questionable data is automatically flagged for review
- The system is built on a relational database, meaning that sophisticated analysis is now possible at the project level
- At the users discretion, the data is automatically posted to the SAVIX, thus relieving programmes of the need to create datafiles and upload to the SAVIX
- It allows project metrics to be compared to national, sub-regional. regional and worldwide norms, derived from the SAVIX website
- It allows MIS administrators to create networks of projects in which aggregation of results or project comparisons can be conducted
As such, the SAVIX MIS is expected to supersede version 4 of the MIS by 2015.
The course is comprised of the following elements:
- Architecture of the MIS
- MIS setup and the creation of mutliple projects in a single MIS
- Creation of MIS user-defined fields
- Creation of organisational structure
- Data entry
- Report preparation and printing
- Report analysis and application to management
- Administrative tools
The course is a companion to the first week’s course, but is designed principally for practitioners who are already implementing a community-managed microfinance programme or who intend to do so.
Participants must come with a reasonably capable laptop, with wireless internet capability and with the registry recently defragmented. Please do NOT bring along an older computer that has a slow processor or one that has not recently been maintained, since this may slow down the process of configuration and data entry. The system runs equally well on a PC or a Mac. Please be aware that Ghana uses a standard British square-pin plug, so be sure to bring an appropriate adaptor.
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