Micro Development Fund Report

31 December 2005Milena Gojkovic

About us

Micro Development Fund is founded in January 2001

MDF is spin off from international organisation Danish Refugee Council.

Mission Statement: MDF is microfinance focused NGO established to support improvements in the social and economic living standards of economically active and poor people in Serbia.

MDF programs and donors

Programs: 1. Micro Loans for business, 2. Vocational Trainings,

Donors: UNHCR, DANIDA, ICRC, Royal Danish Embassy, Tavolo Trentino,EAR

AREA OF OPERATION

20 municipalities in Central and South Serbia

Beneficiaries

Entrepreneurs who want to start up new business or develop existing

Refugees Internally Displaced People Women unemployed

1. MICRO LOANS Loan purpose:

- For purchase of fixed assets- For working capital

Loans are aimed for:- business start up - developing of existing business

Loan amount: from 200 – 10,000 EUR Loan term: 6 - 36 months Interest rate: from 1% to 1,5% Guarantees: promissory note with 2

guarantors or salary ban

Positioning MDF provides access to the financial services to the

micro and SMEs that are marginalised by the formal banks

Simple procedures Loan guarantees are simple Credits are disbursed fast MDF supports both, start up and development

businesses Excellent repayment records (PAR>30 days 0.9% write

off ratio 0,59%) MDF offers long term financial support through repeated

borrowing schemes MDF build relationship with clients providing them other

non-financial support services like: business advice, vocational trainings

MICRO CREDIT PROGRAM SUCCESS DATA

0

500000

1000000

1500000

2000000

2500000

OUTSTANDING PORTFOLIO (€)

Amount

Year

Amount 587,835.0 761,058.0 1,406,532.1,720,585.2,031,838.

Year 2001 2002 2003 2004 2005

1 2 3 4 5

Loan Disbursement Trend

Disbursed loans per years (EAR)

815

1638

2105

641

2277

0

500

1000

1500

2000

2500

1 2 3 4 5

Active loans per years

2001 615

2002 968

2003 1685

2004 2289

2005 2378

0 1000 2000 3000 4000 5000

1

2

3

4

5

No. of acive clients /yearly

Target clients

Active clients -Status

27.0%52.7%

20.3%

Refugees

IDP

Locals.

Supported business activities

Disb. Loans in 2005/business type

Trade, 23.0%

Services, 33.8%

Product., 13.9%

Agriculture, 8.2%

An.Husbandry, 21.1%

Start up businesses through self-employment and its development

Active loans new/existing business

Start-up Business, 18.50%

Existing Business, 81.50%

Start-up Business

Existing Business

Gender structure

Active clients-according to gender

58.0%

42.0%

MEN

WOMEN

Supported business development through subsequent loans

Loan cycles

43.6

34.6

13.7

7.1 1

I LOAN CYCLE

II L.CYCLE

III L. CYCLE

More than III

Golden

Credit Portfolio (30.12.2005.)Number of loans disbursed (as of 2001)

7,476

Amount disbursed 9,254,034€

Average loan amount (2005):

1,319 €

Average loan term 14 months

Active clients 2.378

PAR > 30 days 0.9%

Women 42%

Metodology individual

Portfolio at risk in 2005

Months PAR>30 days PAR>30 days

EUR

Gross Portfolio Outstanding EUR

January 5,9 99,901 1,693,245

February 4.1 70,698 1,724,341

March 3.3 60,178 1,823,588

April 3.8 68,389 1,799,728

May 2.6 48,876 1,879,882

June 2.8 53,729 1,918,897

July 2.2 42,099 1,913,624

August 1,6 30,982 1,936,379

September 0.9 17,736 1,970,669

October 1.1 22.070 2,006,387

November 1 20.099 2,009,910

December 0.9 18.286 2,031,838

Write off January- December 2005

Month Amount in EURO Loan Loss Ratio

January 36 -

February 0 0 %

March 1397 0.8%

April 103 0.03%

May 494 0.03%

June 359 0.02%

July 630 0.03%

August 4 444 0.22%

September 2 225 0.11%

October 0 0%

November 0 0%

December 1,341 0,06%

Average 1,067 0.10%

Total 10,946 0.59%

Efficiency and Profitability Ratio Trend - positive

EFFICIENCY RATIOS 2004 2005

Operational Efficiency 22% 19%

Personal Efficiency 78% 75%

Administrative Efficiency

17% 19%

PROFITABILITY RATIOS 2004 2005

Operational Self Sufficiency

119% 141%

Yield on Portfolio 25% 27%

Return on Assets 21% 25%

VOCATIONAL TRAININGS 1674 Individual Vocational Trainings (until Dec

05). In 2005 realised 207 VT in 8 municipalities in

cooperation with local educational institutions and 19 Curriculum Trainings in Kragujevac in

cooperation with Eurecna/EAR accredited trainers.V.T. EVALUATION RESULTS Dec 2005: 61% of trainees found employments. All of the

employed realised their employments in 1-6 months after finishing VT.

31% of the VT trainees realised employments through the MDF credits.

Strengths MDF is operationally sustainable micro credit

institution Developed networks in more than 20 municipalities

of central and south Serbia Experienced, trained staff Developed and applied microfinance best practices

in context of Serbia Transparency in micro credits Positive audit and institutional assessment reports Ready to grow in portfolio and client outreach Flexible Simple procedures

Opportunities Ready for fast growth Extend client outreach Obtain equity funds Offer more diversified loan products To contribute to local development actions in

synergy Support to private sector development and

market economy Counselling, advice and training of MDF clients Institutional capacity building