Financial Management Training Module II: Finance - Study Guide

Publication Date: 1996
Published by: Calmeadow
Document Type: Toolkit

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A guide to financial management tools - for classroom training or self study.

Covers topics:

• principles of credit: discusses credit fundamentals such as loan utilisation, cash patterns of borrowers, loan terms, pricing, repayment and loan amounts
• the effective cost of borrowing: highlights the costs to clients associated with borrowing, including interest, fees, savings, and opportunity costs. Provides a formula to estimate effective cost, and gives information on costs and benefits of savings
• break even analysis: separates fixed costs and variable costs, calculates the contribution margin and the required business volume to break even. The break even portfolio size for a branch or a whole microfinance organisation is determined
• financial viability of microfinance organisations: analyses the sources and uses of funds, the degree of self sufficiency and the productivity of activities
• delinquency management: covers ratio analysis of the loan portfolio including repayment rates, portfolio at risk, ageing analysis, loan loss reserves, write-offs, and loan rescheduling
• cash flow management: highlights the importance of managing cash flow and covers forecasting of cash requirements, minimisation of idle funds, and liquidity analysis
• creaing a budget: provides an overview of the budgeting process and a sample budget format (income statement)

This document is available in hardcopy only. It can be obtained on payment from PACT Publications.