How Analytics can help MFIs to sustain in

the recent Kenya regulations constraints?

MFI ANALYTICS INSIGHT

Sidi Yasser El Jasouli , 8th November 2016, Nairobi

1. MFI Insight Analytics

2-MFIs Challenges and CAP Rate dilemma

3- Loan portfolio Management
4- Credit Scoring

2 locations
1 continent

1 founder et 4 parteners
With more 50 years BI experiences
In Europe , Africa, USA et Asie

International partner network

( Paris , London , DRC , Kenya, Uganda, Morocco)

+20 consultants

15th
anniversary

50 achieved
projects for more 15 clients

missions achieved in

6 countries diffrents
Over 3 continents

Providing impact to the largest players with the state of Art technology
Technology
Trusted by the top global players

Commercial Bank Value Creation Chain:

Costly support activities
are rarely adapted to
emerging markets.
Traditional banks business
models are too heavy and
are not efficient enough.

Source : Eric Lamarque, Finance Contrle Stratgie Volume 2, N 2, juin 1999

The model of mobile phone penetration in Kenya:

Mobile Phone
Penetration in
2015: 88%

VS

Source: Communications Authority of Kenya, Annual Report 2015

Fixed
Telephone
Lines in 2015:
4/1000
inhabitants

New technologies in Microfinance:

Business Intelligence
Cloud Computing
Mobile Banking
Digital Fingerprinting
Analytics
SaaS

Reducing operational costs and maintaining a high credit portfolio quality

are the key elements to ensure the growth and sustainability of a financial
institution. The regulators requirements have never been as strong as they
currently are on these questions. Additionally, there are also
macroeconomic constraints to overcome in Sub-Saharan African countries,
indeed, maturities are shorter and the amounts lent are lower, so it is vital
to be as efficient as possible. A clever monitoring that incorporates
predictive models for a better credit portfolio management enables the
reduction of operational costs and increases performance in terms of
productivity.
The increasing regulatory reporting requirements of Central Banks and the
changing regulations (especially in terms of setting interest rates) require
internal audit tools to measure performance, monitor properly delinquency
and improve regulatory reporting.

CAP RATE LAW

Challenges in terms of:

EFFICIENCY

Increase staff efficiency

Decrease operational costs
Automatisation of processes
Foster branchless channels
End physical documentation

QUALITY

Better service to customers

Accurate reports
Strong audit & monitoring tools
Fraud reduction
Adapted products

An accurate knowledge of
your portfolio and the
ability to make relevant
analysis is necessary to
enhance your operations
and take strategic
decisions.

 Loan Portfolio Performance monitoring

Balance analysis
Delinquency per Aging
Outstanding Balance at Risk
Concentration Analysis-(region business)

Vintage analysis
Benchmark analysis &Trend analysis
Per Branch
Per product
Per Industry
Credit Scoring System ( application Behavioral )
Write-off and recovery trackingWorkflow management

Agile solutions provide an

insights to all levels of the
hierarchy in the organizations

Better monitoring lets you take

appropriate decisions

Allows you to make forecasts

through accurate analysis with
various granularity levels

Intangibles Results:

.The many available analysis and the aggregation of your different

databases into a unique one will be elements that can support your
operations and improve your organizational processes.
.Your value chain will be streamlined and the costs incurred to expensive
and inefficient support activities will be greatly reduced.

Financial Results:

.The implementation of our solution in your organization will quickly impact

your operating costs which will be significantly reduced because of the
efficiencies gains.
. On the other hand a better management of your resources to tools which
will support you in forecasting future trends will greatly decrease the
delinquency in your portfolio.
.The combination of those factors will have a direct impact on your income
( trends shown on the graph are estimated on an annual basis).

Challenges:
It costs the same to manage a
$50 loan than a $1000 loan
Short life cycle of loans
Low average amount of loans
Lack of financial data

The use of an adapted

credit scoring tool based
on alternative data.

An efficient Portfolio Management

& Monitoring tool.

Credit Assessment can be

done before lending out loans
using Financial Data and
Alternative Data and such as:

Demographic Data
Social Data
Mobile Data

Risk Assessment

Product Offer

Score

Product Name

Overall Risk

Suggested Loan Amount

Default Probability

Suggested Collateral

Odds

Annuity

 Credit Scoring Tools assists in cleaning

the assets by eliminating borrowers that
are not credit worthy and may affect the
portfolio delinquency and default
probability.

Fewer calculations are needed for

carrying out data search