EXECUTIVE SUMARY
The present thesis endeavours to assess the viability of the
FONGS FINRURAL, a nascent network of 09 rural savings and credit cooperatives
in Senegal. More specifically it strives to measure first how the social and
financial performance and the governance vary among the network affiliated
organizations, and second to what extent all this aspects in each MFI could
affect the viability of the network.
For cause of data availability, the research was carried on 7
out of the 9 affiliated MFIs.
The methodology has consisted first in the exploitation of
financial reports, financial statements, business plans, manual of procedures,
minutes, reports and any kind of internal documents seeming useful and second
in visits at basic affiliated associations and client information.
Four data collection tools were used: the factsheet of
financial assessment devised by BRS and ADA, the ECHOS(c) tool of social
performance assessment of Incofin, version 2012, the aggregated index of
governance grid, and specific interview grids to each MFIs based on their
financial and social performance recorded and on their governance score as
well.
Financial data were collected over four years (2008-2011),
while social and governance data were a snapshot of the MFIs as of may-august
2012.
Different descriptive statistics were used for comparisons.
The coefficient of correlation rho of Spearman was used to make links between
financial performance, social performance and governance.
It comes out from the peer group analysis that the membership
of the entire seven MFIs, dominated by women (50%), is growing over years with
an average of 23% sharply higher than that of the country (8.7%). This trend
presents however some specificities pertaining to each MFI.
In the same vein, the network records an increase in savings
collection which is however concentrated within 02 MFIs (29%) which contributed
for 54% of the total deposit of the entire network in 2011. If for the first
MFI (CREC of Méckhé), the situation is due to the involvement of
its groups membership, the second (MEC of Tattaguine) owes its records to its
savings policy mainly based on high rate of compulsory savings (33%) as
requirement for loan application.
Regarding the credit delivery, it appears that except ordinary
loans, most of the loan products catered for are seasonal or working capital
loans and investment loans (more than one year) with bullet repayment albeit
variability in the loans maturity.
To provide such credit products, MFIs rely on three main
sources: the deposits, the borrowings and their equity. Most of the MFIs
provide their loans from the member's deposits and tend to report improvement
of their leverage except the MEC of Dakar and that of Malicounda.
Overall, all the MFIs loan portfolios are growing with an
average growth rate of 17% except the CREC of Méckhé which faced
a decrease in its portfolio of about 47% over the four years. However this MFI
still records the highest gross portfolio amount compared to the others.
Nevertheless, the growth in portfolio is facing also a growth
in portfolio at risk 180 days for all the seven surveyed MFIs meaning some
weaknesses in the loan portfolio management.
In contrast to the PAR, some improvements are reported in
operating expenses ratios which were roughly fewer than 20% except at the MEC
of Dakar which mostly recorded OER over 40% in 2011 and at the MEC of
Malicounda with about 90% in 2009.
As consequence, the OSS of the entire 07 MFIs was appreciable
between 2008 and 2010 (127%-148%) but dropped down to 88% in 2011 due to high
operating expenses at the MECs of Tattaguine and Pékesse.
The results also reveals that albeit claiming to be social
oriented MFIs, the entire MFIs lack adequate tools, information and indicators
to track and to prove that they are putting into practice their social mission,
which often was not clearly stated. Based on the ECHOS(c) scale, it appears
that the MFIs recorded low social performance in general (55%) but seemed to
get better score in access and outreach and customers services, while social
mission, human resources and social responsibility are lessened.
Regarding the governance, the score reveals some acceptable
governance (62%) however with some differences between institutions.
The results of linkages between financial performance, social
performance and governance reveals no trade-off between financial and social
performance, rather it reveals significant synergies between governance and
social perform, and between OSS and human resources.
All these results prove that rural microfinance institutions,
rather rural microfinance network can be viable. It is just a matter of more
governance, more discipline in procedure and more reportage of required
information.
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