Glossary
Glossary of Terms
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Allocation to microfinance investments (%)
The fund's monies expressed as a percentage of the fund's assets that are set aside specifically for investment in the microfinance sector (as opposed to other industries, sectors, or types of projects that the fund may invest in).
Investments or commitments to microfinance investments (%)
Fund assets expressed as a percentage of the fund's assets that are already invested in the microfinance sector or committed to specific microfinance institutions (MFIs), but not yet paid out to those institutions. This may be more than the amount invested and disbursed (not detailed here). It is an efficiency measure for how well the fund commits monies to MFIs (not how well the fund disburses or "hands out" the monies).
Average loan balance per borrower
Gross loan portfolio / number of active borrowers
Average loan balance per borrower / GNI per capita (%)
Average loan balance per borrower expressed as a percentage of gross national income (GNI) per capita.
Average number of active borrowers
(Beginning year number of active borrowers + year-end number of active borrowers) / 2.
Average savings balance per saver
Voluntary savings / number of voluntary savers
Average savings balance per saver / GNI per capita (%)
Average savings balance per saver expressed as a percentage of gross nation income (GNI) per capita.
Bank
A licensed financial intermediary regulated by a state banking supervisory agency. It may provide any of a number of financial services, including: deposit taking, lending, payment services, and money transfers.
Borrowers per staff member
Number of active borrowers / number of personnel.
CGAP financial statements disclosure guidelines
The donors who make up the Consultative Group to Assist the Poor (CGAP), have developed disclosure guidelines to specify information that should be included in microfinance institution (MFI) financial reporting. Donors, other investors, board members, and managers of MFIs rely on financial statements when they assess financial sustainability and loan portfolios. However, many financial statements do not include enough information to permit such an assessment. The disclosure guidelines help to address this problem. The guidelines are not accounting standards, but they do augment accounting standards to improve MFI reporting. They are voluntary norms. They require disclosure of some information not normally found in financial statements like grants and donations, in-kind subsidies, portfolio composition, and delinquency status. They do not prescribe a choice of accounting basis or method, but call for the reporting of the basis or method used. The guidelines come with brief explanations of why the required information is important.
Clients below the poverty line (%)
The percentage of clients living below the poverty line (where the poverty line is defined as the population living on less than USD 2 per day).
Clients in the bottom-half of the population below the poverty line (%)
The percentage of clients in the bottom half of the population below the poverty line (where the poverty line is defined as the population living on less than USD 2 per day).
Clients in households earning less than USD 1/day per household member (%)
The percentage of clients in households earning less than USD 1 per day per household member.
Clients starting microenterprises for the first time (%)
The percentage of clients who access financial services from a microfinance institution (MFI), and who are starting a microenterprise for the first time.
Cooperative or credit union
A non-profit, member-based financial intermediary. It may offer a range of financial services including lending and deposit taking for the benefit of its members. While not regulated by a state banking supervisory agency, it may come under the supervision of a regional or national cooperative council.
Cost per borrower
Operating expense / period average number of active borrowers.
Cost to register a business (percentage of GNI per capita)
The cost to register a business is defined as the total cost involved in accomplishing all procedures necessary to start a business. The cost is expressed as a percentage of a country's gross national income (GNI) per capita (the costs calculated here do not include bribes).
Deposit interest rate (%)
Deposit interest rate is the rate paid by commercial or similar banks for demand, time, or savings deposits.
Deposit rates
This usually refers to rates offered to resident customers for demand, time, or savings deposits. Rates for time and savings deposits are often classified according to maturity and amounts deposited. In addition, deposit money banks and similar deposit-taking institutions may offer short and medium-terms instruments at specified rates for specific amounts and maturities; these are frequently termed “certificates of deposit”.
Donations
Donations received in the financial year used towards the operation of financial services.
Exchange rates
The price in a given currency at which bills drawn in another currency may be bought. In the MIX Market Environment section, the exchange rates are expressed in time-series of national currency units per USD using data from the International Financial Statistics (IFS) service of the International Monetary Fund (IMF). For period average rates, the data are based on the monthly average of market rates or of official rates of the reporting country (and principal, secondary, or tertiary rates for countries maintaining multiple exchange agreements). These estimates are derived on the basis of a simple average of the end-of-month market rates in the markets of the reporting country.
Financial Depth
Liquid liabilities (M3 or broad money) expressed as a percentage of gross domestic product (GDP). They are the sum of currency and deposits in the central bank (M0), plus transferable deposits and electronic currency (M1), plus time and savings deposits, foreign currency transferable deposits, certificates of deposit, and securities repurchase agreements (M2), plus traveller's cheques, foreign currency time deposits, commercial paper, and shares of mutual funds or market funds held by residents.
Financial Expense
All interest, fees, and commissions incurred on all liabilities including the deposit accounts of clients held by the microfinance institution (MFI), commercial, and concessional borrowings, mortgages, and other liabilities.
Financial Revenue
This includes revenue generated from both the gross loan portfolio and investments.
Financial Revenue (Total)
This includes all financial revenue and other operating revenue.
Foreign Direct Investment, net inflows (% of GDP)
Foreign direct investments (FDI) are net direct investments that are made to acquire a lasting management interest (usually ten percent of voting stock) in an enterprise operating in a country other than that of the investor (defined according to residency). The investor's purpose is to be an effective voice in the management of the enterprise. Foreign direct investment is the sum of net equity capital, net reinvestment of earnings, net other long-term capital, and net short-term capital, as shown in the balance of payments.
Fund Advisor(s)
The company or companies that are given primary responsibility for managing a fund.
Fund Assets (US$)
Total Assets held by a Fund.
Fund Assets allocated to MF Investments (US$)
The fund's monies set aside specifically for investment in the microfinance sector (as opposed to other industries, sectors, or types of projects that the fund may invest in).
Fund currency
The main currency used by the fund for valuation purpose.
Fund Manager
Fund managers are responsible for overall fund strategy and the buying and selling decisions of securities in a fund's portfolio. Management teams may consist of many people, but if one manager is considered a central figure or lead manager, that individual's name should be known. Of importance is the year in which the manager began running the fund to determine how much of a fund's performance is attributable to its current management. The term "multiple managers" refers to a situation when more than two people are involved in the fund management, and they manage independently. Where this term is used, quite often the fund has divided net assets in set amounts among the individual managers. In most cases, multiple managers are employed at different sub-advisors or investment firms.
Fund Subadvisor(s)
The advisor can employ another company, called the sub-advisor, to handle the fund's day-to-day management. In these instances, the portfolio manager generally works for the fund's sub-advisor, and not the advisor.
Gross domestic product (GDP) (current USD)
Gross domestic product (GDP) measures the total output of goods and services for final use occurring within the domestic territory of a given country. Gross domestic product at purchaser values (market prices) is the sum of gross value added by all resident and non-resident producers in the economy plus any taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for the depreciation of fabricated assets or for the depletion and degradation of natural resources.
Gross domestic product (GDP) growth (annual percentage)
Gross domestic product (GDP) measures the total output of goods and services for final use occurring within the domestic territory of a given country, regardless of the allocation to domestic and foreign claims. Gross domestic product at purchaser values (market prices) is the sum of gross value added by all resident and non-resident producers in the economy plus any taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for the depreciation of fabricated assets or for the depletion and degradation of natural resources. National currency GDP is converted into US dollars at the relevant year's conversion rate (see the "balance of payments" section below).
Gini Index
The Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz Curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz Curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus, a Gini index of zero represents perfect equality, while an index of 100 implies perfect inequality. Gross national income (GNI) (formally gross national product [GNP] in the 1968 System of National Accounts [SNA] terminology) measures the total domestic and foreign value added claimed by residents. Gross national income comprises GDP plus net receipts of primary income (compensation of employees and property income) from non-resident sources.
GNI per capita, Atlas Method (current USD)
Gross national income (GNI) per capita (formerly gross national product [GNP] per capita in the 1968 System of National Accounts [SNA] terminology) is the gross national income, converted to US dollars using the World Bank Atlas Method, divided by the midyear population. Gross national income is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. Calculated in national currency, GNI is usually converted to US dollars at official exchange rates for comparisons across economies, although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international transactions. To smooth fluctuations in prices and exchange rates, a special Atlas Method of conversion is used by the World Bank. This applies a conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted for the difference between the rate of inflation in the country, and through 2000, that in the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). For 2001 onwards, these countries include the Euro Zone, Japan, the United Kingdom, and the United States. A country's inflation rate is measured by the change in its GDP deflator.
Gross domestic savings (percentage of GDP)
Gross domestic savings are calculated as the difference between the gross domestic product (GDP) and total consumption. Total consumption expenditures cover the consumption by households and the general government.
Gross loan portfolio
All outstanding principal for all outstanding client loans, including current, delinquent, and restructured loans, but not loans that have been written-off. It does not include interest receivable. It does not include employee loans.
Income share held by highest 10%
Income share held by lowest 10%
Inflation rate (changes in consumer prices)
IIndices shown for consumer prices are the most frequently used indicators of inflation and reflect changes in the cost of acquiring a fixed basket of goods and services by the average consumer. The percentage changes are calculated from the index number series. Preference is given to series having wider geographical coverage and relating to all income groups, provided they are no less current than more narrowly defined series. The weights are usually derived from household expenditure surveys (which may be conducted infrequently). Other limitations might exist in terms of coverage of commodities for pricing, income groups, or their expenditure in the chosen index. The Laspeyres Index formula is the most commonly used method of calculating the changes in consumer prices.
Interest rate spread (lending rate minus LIBOR)
Interest rate spread is the interest rate charged by banks on loans to prime customers minus the interest rate paid by commercial or similar banks for demand, time, or savings deposits. The spread over the London interbank offered rate (LIBOR) is the interest rate charged by banks on short-term loans in local currency to prime customers minus LIBOR. The LIBOR is the most commonly recognized international interest rate and is quoted in several currencies. The average three-month LIBOR on US dollar deposits is used here.
Lending rate
Lending rate is the bank rate that usually meets the short and medium-term financing needs of the private sector. This rate is normally differentiated according to the creditworthiness of borrowers and the objectives of financing.
Loan loss provision expense
A non-cash expense that is used to create or increase the loan loss reserve on the balance sheet. The expense is calculated as a percentage of the value of the gross loan portfolio that is at risk of default.
Loan loss reserve
The portion of the gross loan portfolio that has been expensed (provisioned for) in anticipation of losses due to default. This item represents the cumulative value of the loan loss provision expense, less the cumulative value of loans written-off.
Loan loss reserve ratio (%)
Loan loss reserve expressed as a percentage of gross loan portfolio.
Loans below USD 300 (%)
The percentage increase or decrease year-over-year in the net asset value.
Net asset value (percentage increase on previous years)
The percentage increase or decrease year-over-year in the net asset value.
Net asset value (percentage three-year annual average)
The percentage (average) increase or decrease in the net asset value over the last three years.
Net asset value (percentage increase since inception)
The percentage (average) increase or decrease in the net asset value since inception.
Net income (after taxes and before donations)
The net income (before taxes and donations) less any taxes paid by the institution.
Net income (after taxes and donations)
The net income (after taxes and before donations) plus any donations recognized by the institution.
Net income (before taxes and donations)
The net operating income plus net non-operating income, before taxes and donations.
Net loan portfolio
The gross loan portfolio less the loan loss reserve.
Net non-operating income
The non-operating revenue less the non-operating expense.
Net operating income
Financial revenue (total) less all expenses related to the microfinance institution's (MFI's) core financial service operations, including operating expense, financial expense, and loan loss provision expense. It does not include donations or revenues and expenses from non-financial services.
Net private capital flows
This consists of private debt and non-debt flows. Private debt flows include commercial bank lending, bonds, and other private credits; non-debt private flows are foreign direct investments and portfolio equity investments.
New projected microfinance investments next year (USD)
A new fund's monies that are to be invested in the microfinance sector over the next 12-month period (excluding funds already committed to specific microfinance institutions [MFIs], but not yet disbursed).
Non-governmental organization (NGO)
An institution that provides similar services to those of a bank, but is licensed under a separate category. The separate license may be due to lower capital requirements, to limitations on financial service offerings, or to supervision under a different state agency. In some countries, this corresponds to a special category created for microfinance institutions.
Non-operating expense
All expenses not directly related to the core microfinance operation, such as the cost of providing business development services or training (unless the microfinance institution [MFI] includes training as a requirement for receiving loans).
Non-operating revenue
All revenue not directly related to core microfinance operations, such as revenue from business development services, training, or sale of merchandise.
Number of active borrowers
The number of individuals who currently have an outstanding loan balance with a microfinance institution (MFI), or are responsible for repaying any portion of the gross loan portfolio.
Number of active clients
The number of individuals who are active borrowers and/or savers with a microfinance institution (MFI). A person with more than just one such account (i.e. with a loan and a savings account) is counted as a single client in this measure.
Number of active microfinance investments
The number of active financial and technical (e.g. technical assistance) transactions (including loans and debt securities, equity, grants, and guarantees) carried on by the fund with its microfinance institution (MFI) clients.
Number of personnel
The number of individuals who are actively employed by a microfinance institution (MFI). This includes contract employees or advisors who dedicate the majority of their time to the MFI even if they are not on the MFI's roster of employees.
Number of voluntary savers
The total number of individuals who currently have funds on deposit with a microfinance institution (MFI), which the MFI is liable to repay. This number applies only to deposits that are held by the MFI, not to those deposits held in other institutions by the MFI's clients.
Number of women borrowers
The number of active borrowers who are women.
Operating expense
Expenses related to operations, such as all personnel expenses, rent and utilities, transportation, office supplies, and depreciation.
Operating expense / loan portfolio (%)
Operating expense expressed as a percentage of period average gross loan portfolio.
Operating expenses / period average fund assets
Fund operating expenses / ((beginning year fund assets + year-end fund assets) / 2).
Operational self-sufficiency (%)
Financial revenue (total) expressed as a percentage of the sum of financial expense, loan loss provision expense, and operating expense.
Other revenue related to financial services
Revenue that is generated from other financial services, such as fees and commissions for non-credit financial services that are not considered financial revenue. This item may include revenues linked with lending such as membership fees, automated teller machine (ATM) card fees, transfer fees, or other financial services such as payment services or insurance.
Period average assets
(Beginning year total assets + year-end total assets) / 2.
Period average equity
(Beginning year total equity + year-end total equity) / 2.
Period average gross loan portfolio
(Beginning year gross loan portfolio + year-end gross loan portfolio) / 2.
Period average personnel
(Beginning year personnel + year-end personnel) / 2.
Population density (people per square kilometre)
Population density is a country's midyear population divided by its land area in square kilometres. Population is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship (except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin). Land area is a country's total area, excluding any area under inland water bodies, national claims to continental shelf, and exclusive economic zones. In most cases, the definition of inland water bodies includes major rivers and lakes.
Annual population growth (%)
The annual population growth rate is the exponential change for a given period.
Population, total (millions)
Total population based on the de facto definition of population which counts all residents regardless of legal status or citizenship (except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin).
Portfolio at risk > 30 days
The value of all loans outstanding that have one or more instalments of principal past due more than 30 days. This includes the entire unpaid principal balance including both the past due and future instalments, but not accrued interest. It does not include loans that have been restructured or rescheduled.
Portfolio at risk > 30 days ratio (%)
Portfolio at risk > 30 days / gross loan portfolio.
Portfolio investment, bonds (PPG + PNG) (NFL, current USD$)
Portfolio investment flows, bonds, are net and include portfolio debt flows: bond issues purchased by foreign investors.
Portfolio investment, equity (DRS, current USD)
Portfolio investment flows, equity, are net, and include non-debt-creating portfolio equity flows: the sum of country funds, depository receipts, and direct purchases of shares by foreign investors.
Poverty gap at USD 1 per day (%)
The poverty gap is the mean shortfall from the poverty line (counting the non-poor as having a zero shortfall) expressed as a percentage of the poverty line. This measure reflects the depth of poverty as well as its incidence. The population living below USD 1 per day is the percentage of the population living on less than USD 1.08 per day at 1993 international prices (equivalent to USD 1 in 1985 prices, adjusted for purchasing power parity).
Poverty headcount, rural (percentage of population)
Rural poverty headcount is the total number of rural people living below the national poverty line.
Private capital flows, total (percentage of GDP)
This consists of private debt and non-debt flows. Private debt flows include commercial bank lending, bonds, and other private credits; non-debt private flows are foreign direct investment and portfolio equity investment. This is expressed as a percentage of gross domestic product (GDP) per capita.
Profit margin
Net operating income / financial revenue (total).
Real interest rate (%)
Real interest rate is the lending interest rate adjusted for inflation as measured by the gross domestic product (GDP) deflator.
Region
A geographic region in which a microfinance institution (MFI) operates (classified into eight regions for the MIX Market): Africa; East Asia, and the Pacific; Eastern Europe and Central Asia; the Middle East and North Africa; Latin America and the Caribbean; North America; South Asia; and Western Europe.
Return on assets (%)
Net operating income less taxes expressed as a percentage of period average assets.
Return on equity (%)
Net operating income less taxes expressed as a percentage of period average equity.
Rural Bank
Banking institutions that target clients who live and work in non-urban areas and who are generally involved in agricultural-related activities.
Rural population (percentage of total population)
Rural population expressed as a percentage of total population.
Savers per staff member
Number of voluntary savers / number of personnel.
Taxes
This term includes all taxes paid on net income or other measure of profits as defined by local tax authorities. This item may also include any revenue tax. It excludes taxes related to employment of personnel, financial transactions, fixed-assets purchases, or other value-added taxes.
Total assets
The total of all net asset accounts.
Total equity
The total of all equity accounts less any distributions.
Total liabilities
The total of all liability accounts.
Total liabilities and equity
The sum of total liabilities and total equity.
Type of institution (microfinance institution)
Microfinance institutions are classified into six categories for the MIX Market: Bank; cooperative/credit union; non-bank financial institution; non-profit (non-governmental organization); rural bank; other.
Unemployment, total (percentage of total labour force)
The total number of individuals that are actively seeking jobs but remain un-hired.
Voluntary savings
Deposits from the general public and members that are not maintained as a condition for accessing a current or future loan, and are held with the institution.
Women borrowers (%)
The number of female borrowers expressed as a percentage of the total number of active borrowers.
Workers' remittances, net (BoP, current USD)
The World Bank adheres to international guidelines in defining gross national income (GNI), and its classification of workers' remittances may therefore differ from national practices.
Workers' remittances, receipt (BoP, current USD)
Workers' remittances are current transfers by migrants who are employed or intend to remain employed for more than a year in another economy in which they are considered residents. Some developing countries classify workers' remittances as a factor income receipt (and thus as a component of gross national income (GNI) (formally gross national product [GNP] in the 1968 System of National Accounts [SNA] terminology). The World Bank adheres to international guidelines in defining GNI, and its classification of workers' remittances may therefore differ from national practices.
Write-off ratio (%)
Write-offs for a 12-month period expressed as a percentage of period average gross loan portfolio.
Write-offs for the 12-month period
The total amount of loans written-off during the period. A write-off is an accounting procedure that removes the outstanding balance of the loan from the gross loan portfolio and from the loan loss reserve when these loans are recognized as uncollectable.