What is the Performance Monitoring Tool?
The PMT 2009 is essentially a tool to capture data from an institution’s accounting and portfolio system via an input form or an import function; based on this data it creates financial reports and ratios to be used by an institution’s management. It is not a comprehensive Management Information System, and shouldn’t be seen as a substitute for this. However, it collects, stores and computes key financial data in a systematic way providing value for any financial institution.
The purpose of the PMT is to enable MDIs, MFIs, SACCOs and financial institutions involved in microfinance to self monitor, report and receive feedback on their progress against relevant performance standards and peer groups in a coherent and transparent way. This will contribute to improved risk management and promote adherence to minimum requirements and good practices within the entire industry, thus improving financial services available to existing as well as prospective clients. While saving valuable time spent on reporting for the various financial institutions, this will also ensure the availability of more comprehensive and accurate information on the sector, and serve as a cornerstone for regulation and policy making for Uganda’s financial system as a whole.
Special care was taken to consider the different reporting requirements of all kinds of institutions involved in microfinance. This led e.g. to the inclusion of certain ratios used by the PEARLS tool, specialised on performance monitoring of savings and credit cooperatives. Also, you will find that input forms and reports differ from one institution to the other, since not all items are relevant for all types of institution.
The input form has a simple tabular format, which requires minimal training to be used. The input data is stored on the local computer in a small-scale database whenever a user saves the input form. The database is able to capture data for multiple years, and even for multiple institutions or branches, if desired.
The PMT contains a real-time ratio generator so, with only a few clicks, various reports can be produced based on the most current input or even based on historic data. A set of five reports are provided for immediate usage: Balance Sheet, Income Statement, Cash Flow, Portfolio/Outreach and Key Performance Indicators.
While those reports will give management an immediate picture of the financial status of their organisations, managers will gain even more insights as they submit their reports in digital form (as a computer file via email or on a flash disk) to the central Performance Monitoring System (PMS) hosted at AMFIU. AMFIU is committed to treat submitted data in strict confidence.
Aggregating this data at national and regional level as well as according to meaningful peer groups yields graphical reports which are returned to each institution submitting its data. Through this, management and board are able to make a comparative judgement on their institution’s status and take informed decisions to enhance its performance, increase its outreach and improve its sustainability.
The PMT is also geared at serving as a universal tool to satisfy the reporting needs of development partners, associations and regulators – diminishing the need for multiple reporting.
As microfinance keeps evolving, the user’s requirements for the PMT will also change. Hence, AMFIU – as the custodian of the tool – can modify, add or remove input forms as well as reports if stakeholders agree that changes are necessary.
Whats new about the PMT 2009?
This release is based on the original PMT, which was introduced to the microfinance community in 2004, enhanced in 2007 and has now been reviewed based on feedback received from several years of experience with previous PMT versions. The process of developing the original joint reporting format which became the PMT was consultative and participatory, engaging the maximum number of stakeholders during the various stages. As a key player throughout the process, the Association of Microfinance Institutions of Uganda (AMFIU) took the lead in popularising the concept within the Ugandan microfinance industry, while development partners assisted in the development and dissemination of concept papers, establishing broadbased support from other agencies and soliciting input from international resources.
With a majority of development partners pledging full support to the adoption of the tool in 2002, and the Ministry of Finance, Planning and Economic Development and Bank of Uganda backing it up, the original PMT was conceived, developed, tested, adjusted and rolled out for distribution to MFIs in 2004. Based on feedback from various financial institutions using it, a decision was made to upgrade the software, with the primary goals to further simplify reporting to development partners and other interested parties, to be more institutionally focused and useful to financial institution management and finally to include varied input and reporting formats to accommodate the newly licensed MDIs and the large number of SACCOs.
The result was the PMT 2007 which was subsequently rolled out to many institutions countrywide. This latest release of the PMT now addresses usability issues voiced by some of the users but, most importantly, it now uses a standardised digital reporting format which enables the tool to directly submit reports to a central microfinance database, the Performance Monitoring System (PMS) hosted at AMFIU. Moreover, existing Management Information Systems can now produce reports in the very same digital format, so re-entering data will become redundant.
While a central database will provide valuable industry aggregates to be used by regulatory bodies and national as well as international organisations, the main focus will be to provide financial institution management with informative and meaningful individual performance reports as well as peer group benchmarking to facilitate management, to increase financial control and promote adherence to sound practices.
As with the previous tools, the PMT 2009 is distributed free of charge to any institution. Click here for more information.
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