MFI Appraisal and Recommendation Report
Telephone: (0343) 499303
Name of MFI :
KOPERASI KREDIT SAWIRAN
Address : KM 6 Nongko Jajar, Kabupaten Pasuruan
Fax: ; Mobile Phone:
e-mail:
Contact Person: Kokok Budianto
MFI at a Glance
Legal Status
: Cooperative
Years in Operation : Since 1997
Vision and Mission : Vision: To create a financial services institution that is professionally managed in accordance
with the values and principles of the cooperative. Mission: To improve the quality of life and welfare of
members.
Year
# of Staff
# of Loan Officer
# of Active Borrowers
# of Branches
ROA
ROE
Total Assets (IDR '000)
Institutional
Factors
Operational
(Max 40%)
Grade
Des-03
15
5
925
5
0,09%
0,48%
10.145.847
Year
Des-04
15
5
1.054
5
1,19%
5,93%
12.996.723
Key Weaknesses
1. Saving and loans insured by Daperma, an
internal Credit Union
1. Accounting manual is outdated and some inconsistencies in accounting
methods exist
2. Standard Operating Procedures for Loan Operations are not available
3. MIS does not have the capabilities to produce reports to support future
growth or back up data; Some reports prepared manually
4. No disaster contingency plan has been established
5. Weak control over documents pertaining important customers
information and no proper security measurement for use of computers
6. No internal control function or audit program
7. Weak supervisory board
2. Supported by Asian Cooperative Credit Union,
Bangkok
28 %
31 %
Projected
2006
18
7
1977
6
1,64%
9,17%
29.910.952
Key Strengths
1. Fast increase in cooperative members resulting in
ongoing increase of equity
Financial
Performanc
e
(Max 50%)
Des-05
16
5
1.365
5
2,04%
9,62%
20.177.089
2. Administrative and financial support from the
Pusat Koperasi Kredit (secondary cooperative),
Jawa Timur East, Malang
3. Low non-performing loans; high capital
adequacy ratio, good structure of assets; high
percentage of loan portfolio compared to total
assets
1. 50% of loan portfolio disbursed to corporations
2. Credit analysis methods very simple, lacking sufficient information
3. Loan loss reserve is inadequate and not in accordance with BI or CGAP
standards
4. System to allocate certain expenses to TP (branch-service point) and
cost of funds borrowed by TP have not been established. This has resulted
in an inaccurate presentation of TP’s profit and loss account report
5. High yield gap
4. Good profit trends, and high return on equity
Strategy and
Funding
needed
(Max 10%)
1. Cooperative continues to develop business, to
increase total members and equity
6%
1. Cooperative does not have a medium term (3-5 year) business plan
2. Cooperative regarded as model to other MFIs
Composite Grade
C
(65 %)
Comment of the result:
Adequate institutional performance, with
some institutional deficiencies
Loan
Recommendation:
IDR 2,5 billion;
terms : 3 Years,
installment every
3 months
Appraisal team and date: MHA,WH, RNM, 26 May 2006
Jl. Kemang Selatan I No.3, Bangka | Jakarta Selatan 12730, Indonesia | tel 62.021.719.4948 | fax 62.021.7179.0907
Version 3.2 as 3/6/2016
MFI Appraisal and Recommendation Report
I.
KEY PERFORMANCE INDICATOR HIGHLIGHTS
1.
Operational Performance
2.
Financial Performance
A. Profitability Ratios
B. Asset/Liability Management
(* Adjusted figure: see table 2.3.)
C. Portfolio Quality
D. Efficiency Ratio
Ratio
PAR (>30)
NPL
Loan Loss Reserve
Des-03
16,27%
4,21%
0,00%
Year
Des-04
12,65%
2,69%
0,81%
Des-05
14,15%
2,07%
1,42%
Ratio
Financial and Operating Expense Ratio
Operating Expense Ratio
Loan Officer productivity
Des-03
25,40%
7,27%
185
Year
Des-04
23,45%
7,07%
211
Des-05
23,78%
6,72%
273
Total portfolio per loan officer (IDR '000)
1.521.123
2.097.081
3.532.728
Capital Adequacy, Cost of Funds,
Debt to Total Asset & Debt to Total Equity
Portfolio at Risk
Aging Distribution
90,00%
5,00
80,00%
4,50
4,00
70,00%
12,00%
10,00%
3,50
60,00%
Debt to Equity
3,00
50,00%
2,50
40,00%
8,00%
6,00%
2,00
4,00%
30,00%
1,50
20,00%
1,00
10,00%
2,00%
0,50
0,00%
0,00%
2003
2004
Capital Adequacy Ratio
Debt to Total Asset
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
2005
2003
2004
2005
31 - 60 days
61 - 90 days
91 - 120 days
Cost of Funds Ratio
Debt to Equity
1 - 30 days
2
> 120 days
MFI Appraisal and Recommendation Report
PAR, Write-off Ratio, Rescheduling and
Refinancing per Outstanding Portfolio
12,00%
18,00%
16,00%
6,00%
120,00%
9,62%
10,00%
100,00%
14,00%
12,00%
4,00%
10,00%
3,00%
8,00%
6,00%
2,00%
ROA, ROE
5,00%
PAR>30 DAYS
Recheduling per Outstanding
Portfolio
7,00%
Yield Gap, ROA, ROE, OSS
2,00%
0,00%
0,00%
2003
2004
80,00%
5,93%
6,00%
60,00%
4,00%
40,00%
2,04%
4,00%
1,00%
8,00%
2,00%
1,19%
0,48%
0,09%
20,00%
0,00%
0,00%
2005
2003
Adjusted Write-off Ratio
Rescheduling per Outstanding Portfolio
PAR > 30 days
2004
ROA
Income and Expense Distribution
ROE
2005
Yield Gap
OSS
Clients per Staff, Client per Loan Officer
Portfolio per Loan Officer
100%
80%
300
60%
250
40%
200
20%
150
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
100
0%
2003
2004
Interest and fee income
from loans
Income from investments
Income from other
finance-related services
2005
Banks' loan interest expense
Interest and fee expense
Loan loss provision expense
Salaries & benefit expense
General & Administrative Expense
Other Expense
50
Dec-03
Dec-04
Dec-05
Personnel productivity
Loan Officer productivity
T otal portfolio per Loan Officer (Rp000)
Asset Composition
Other longterm assets
0%
Other shortterm assets
0%
Liability and Equity Composition
Net Fixed
assets
8%
Additional
capital
5%
Cash and due
from banks
5%
(Loan loss
reserve)
1%
Paid-in equity
from
shareholders
14%
Loans:
subsidized
0%
Loans:
commercial
banks
24%
Savings
Accounts:
compulsary
0%
Savings
Accounts:
voluntary
22%
Other shortterm liabilities
2%
T otal loan
portfolio
86%
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Current year
surplus
(deficit)
2%
T ime deposits
31%
3
MFI Appraisal and Recommendation Report
II. BACKGROUND
The Credit Cooperative, Sawiran (Kopdit Sawiran), hereafter called Kopdit, is located 6 km from Nongkojajar.
Kopdit was established in 1989 as a cooperative for the employees of Sawiran Retret House and sponsored by
Father (Romo) Willy CDD, the Leader of Sawiran Retret House. Initially, the formation of the cooperative was
only to serve the employees of the Retret House and was established by 20 founding members. In 1998, Kopdit
began accepting people from outside the Retret House as members.
The Kopdit Sawiran is a cooperative with the overall goal of strengthening the local economy, improving the
peoples’ small businesses through the membership of a cooperative, building a collective saving fund, and
disbursing financial assistance thereby improving the welfare of the members. The cooperative was founded in the
community and eventually gained the support of the Santo Yoseph College Foundation, Malang chaired by Father
(Romo) Willy CDD. Father Willy is now appointed as the Senior Advisor.
At the early stages of the formation of the cooperative, Santo Yoseph College provided assistance in the form of
funds for pre-opening expenses, human resources and other utilities.
Based on the articles of incorporation of the Kopdit, the Board of Governance will be appointed in the annual
members meeting for a term of 3 years. As of March 2006, a new Board of Governance and Board of Supervisors
was just appointed. To date, Kopdit has expanded their activities through establishing 4 additional branches (TPTempat Pelayanan).
III.
FINDINGS: OPERATIONAL PERFORMANCE
1. Institutional Analysis.
Inst:
4
Max :
5
Officially, Kopdit Sawiran is a cooperative based on the Revised Cooperative Deed and approved by the
Department of Cooperatives, Small and Medium Enterprises of the Republic of Indonesia, no
2/PAD/KDK.13.14./VIII/2000 dated August 10, 2000. Kopdit currently has 387 members divided into 12
groups. Father Willy continues to play a major role as the generator and advisor in the Kopdit.
Membership of the Kopdit is open for everybody regardless of economic and social status, ethnic group,
religion, race and gender, even though the Kopdit was initially formed by the Catholic community.
Neither the Kopdit Basic Rules and Regulations nor the Institutional Policies mention a vision or mission for the
institution. Only the Articles of Incorporation state that the objective of the Kopdit is to improve the welfare of
the members and the families, to strengthen the economy and businesses of the members, and to conduct the
Kopdit activities in line with sound economic principles.
Since 1998, Kopdit has had a relationship with Puskopdit (secondary cooperative). Puskopdit provides and
coordinates training and technical assistance, short term financing assistance and facilitates intercooperative
financial assistance for cooperative members.
The relationship between Kopdit and other cooperatives and credit unions in East Java has been excellent.
Kopdit is regarded as a model cooperative.
Currently, the Kopdit is helping to develop and improve itself as an advisor to the 25 other credit unions and
Cooperatives, including Credit Union Paroki Nganjuk, Credit Union Paroki Rembang, Credit Union Keuskupan
Banjarmasin, Credit Union Lestari Wonosobo dan Credit Union Sapu Lidi Yogyakarta.
Kopdit has not developed relationships with any international NGO outside the existing affiliation (ACCU).
2. Governance
Inst:
3
Max :
5
As a Kopdit, full authority and ownership lies with the members and decisions are made at members meetings.
The members meeting is conducted minimum once a year or if the situation dictates, the meeting may be held
more than once. The members meeting exists to appoint, assign, elect and terminate one or all members of
Board of Supervision (BOS) and Board of Governance (BOG), in accordance with the Kopdit basic rules and
regulations.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
4
MFI Appraisal and Recommendation Report
The basic function of the Board of Supervision is to exercise supervision of the implementation and to ensure
that the policies and management of the Kopdit are appropriately carried out. The function of the Board of
Governance is to manage the institution and business, representing the institution externally, including legal
proceedings, on behalf of the institution in a court of law and be responsible to the members through the General
Annual Members Meeting.
The Board of Governance delegates the day-to-day management of the institution to the General Manager, who
is appointed by the Board.
The Board of Governance and Board of Supervision are listed below:
No.
1.
Name
Drs. Sugeng S
2.
Sugondo
3.
4.
5.
Susilo Mukti
Maria Tatik
6.
Drs. Sutikno
7.
Devi Ika
Position
Chairman (Ketua)
Vice Chairman (Wakil
Ketua)
Secretary (Sekretaris)
Treasurer (Bendahara)
Chairman of the Board
of
Supervision
(BOS)(Ketua Pengawas)
Secretary
(Sekretaris
Pengawas)
Member of the BOS
(Anggota Pengawas)
Haji m. Iksan S.Pd
Qualifications
University
Graduated,
(Sarjana, Pengajar)
Lecturer (Pengajar)
Lecturer.
Lecturer (Pengajar)
Business (Pengusaha)
University graduated and Lecturer
(Sarjana, Pengajar)
University graduated and Lecturer
(Sarjana, Pengajar)
University graduated and civil servant
(Sarjana, Pegawai Negeri)
Management meetings between the Board of Governance and the management are conducted once a month. In
general, the meetings’ agendas include discussions on the policies of Kopdit, the progress of the institution,
problem loans, and legal and human resources issues. Minutes of meetings are prepared.
The General Meeting of Board of Governance (BOG), Board of Supervision (BOS) and Management are
conducted once every 3 months to discuss the progress of Kopdit, problem loans, issues and the findings of BOS
inspection.
Most of the members of BOG have backgrounds in education; the members do not have any experience or
capability in the field of finance, banking or law. Even so, they have a strong commitment to improve and to
develop Kopdit as an independent institution. The BOG does not interfere the day-to-day operations of Kopdit.
The members of BOS, in general, do not have sufficient knowledge and experience in this field. The BOS
prepared a one-year working plan and schedules for inspection which were approved by the Annual Members
Meetings.
The application and distribution of SHU Funds (Sisa Hasil Usaha–Net Profit) is decided in the Annual Members
Meeting. A certain amount of the Net Profit (SHU) is allocated to the general reserve account to strengthen the
equity and to the reserve account as a provision for credit risk.
Inst:
3. Management Team
4
Max :
5
The Kopdit Sawiran management team is:
No.
1.
2.
3.
4.
5.
6.
7.
Name
K. Budianto
Setya Edi
Heri Susanto
Widi Hatmanto
Suharianto
Budi
Daniel
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Position
General Manager –Kopdit Sawiran
Manager TP(Branch) Sawiran
Manager TP(Branch) Tosari
Manager TP(Branch) Kepanjen
Manager TP (Branch)Capang
Manager TP(Branch) Pakis
Assistant for Internal Audit (Main
function is as Loan Officer in Kepanjen
Branch (TP)
Qualification
Sarjana Filsafat
5
MFI Appraisal and Recommendation Report
The management team is headed by Kokok Budianto, General Manager, a university graduate with extensive
experience attending various cooperative programs and trainings. The other members of management team were
educated in local universities and have been working with the Kopdit for more than 5 years. The team is strong,
solid, and fully understands financial and operational conditions, challenges and opportunities facing Kopdit.
These matters are routinely discussed in the monthly management team meeting.
The composition of the team is quite complete, with clear accountability and control, and the capacity to support
growth in the future. There also a small management team in every TP (Tempat Pelayanan – Branch), which
serves as a back up to implement the policies defined by the management team at the Kopdit level.
Any policy decision will be made in accordance with the written policy & procedures and all decisions made are
documented.
4. Organizational Structures
Inst:
3
Max :
5
The structure of organization is quite complete and shows a clear line of accountability, responsibility and
authority as well as defined position descriptions. The locations of the TPs are quite strategic and effective and
Kopdit has a plan to open a new TP in Dinoyo, Malang and Ngadisari, Pasuruan.
Officially, the office of the General Manager is in Sawiran, and he supervises five TPs. Each TP is headed by a
manager. The General Manager is assisted by three assistants for handling internal audit, promotion & training
and credit. Under the TP’s manager, there are two functions, i.e. credit & marketing and opperations.
From January 2006 to May 2006, Kopdit recruited an additional 7 staff, making the total number of staff,
including the General Manager, 22. Seven of them are assigned as Loan Officers.
The delegation of authority to the managers are related to credit approvals, while the authority to approve
expenses is limited to and in line with the needs and approved budget.
Each TP is treated as a profit center unit and maintains a separate balance sheet and income statement which are
consolidated monthly. The policies and procedures are standardized and applied throughout the TPs.
5. Product and Services Savings
Inst:
4
Max :
5
Kopdit has two main products, saving and loans. Each product has a variety of sub products.
The types of savings are as follows:
1.
2.
3.
4.
5.
6.
Basic saving and compulsory saving (monthly dues): These saving accounts are considered as equity.
Daily interest savings A (Sibuhar A): Non Kopdit member saving account – may be deposited and
withdrawn any time.
Daily Interest saving B (Sibuhar B): Kopdit member saving account – may be deposited and withdrawn.
If the account holder has a loan with Kopdit, this saving account will be treated as collateral & non-interest
bearing, and may not be withdrawn until loan is fully paid.
Daily interest saving D (Sibuhar D): Non-member saving account.
Siaga Saving: This is a long term saving account (5 to 25 Years), and may not be withdrawn until maturity.
Treated as equity.
Time saving /Deposit Time: Deposit for 1, 3, 6 and 12 months.
Each member must have basic and compulsory (monthly dues) saving accounts. Those are the Kopdit’s capital
accounts. Beside these, Kopdit has other saving accounts which are also treated as equity accounts, the basic
saving and compulsory savings (monthly dues) accounts for extraordinary members (member below 15 years of
age)
Loan types are as follows:
1.
2.
3
4.
5
6.
General type of loans :
Emergency loans
:
Productive loans
:
Vehicle loan
:
Korporasi loan
:
Housing loan
:
For business/working capital.
For emergencies such as school fees
For purchasing car or motorcycle
Loan disbursed to other cooperatives and corporations, larger loans
For purchasing houses
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
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MFI Appraisal and Recommendation Report
7.
8.
9.
Siaga Loan
Multi purpose loan
Other party loan
:
:
Kopdit provides loans not only to members but also to non-members. Interest rates charged to non-member are
higher than those to members. Non-members do not have the right to receive profit sharing (SHU).
In accordance with the articles of incorporation of Kopdit and the regulations issued by the Department of
Cooperatives, Small and Medium Enterprises, Kopdit is only allowed to provide loans to members and
candidate member or member of other cooperatives.
The services rendered to customers are of good quality. The loan process is fairly fast. Decisions on loans can
be obtained within 2 days to one week. Kopdit also provides pick-up cash and delivery, not only for saving
transactions but also for loans office hours is flexible. Customers may deposit or withdraw cash any time, as
long as the employees are available, or by appointment.
Savings and Loan products are described below in the following table:
Savings:
Name of
Product
Sibuhar A
Sibuhar D
Sisuka
Active
savers
1006
1089
28
Average
Term
Daily
Daily
Monthly
Average
Balance
(IDR’000)
1,209,543
281,729
226,000
Effective
Interest
Rate
8%
8%
12%
% of
Clients
47
51
1
% of Total
Savings and
Deposits
11
25
60
Loans:
Name of Product
# of
Active
Client
General loans
892
13
38
Korporasi loans
Housing loans
Amount (IDR’000)
Effective
Average
Max
Interest
Rate
8,430
185,000
27% p.a.
542,231
38,577
1,000,000
150,000
27% p.a.
27% p.a.
Required Guarantee
Motor vehicle,
Land & Building
Land & Building
Land & Building
Days to
Receive
% of
Clients
%of
Portfolio
7 days
75
42
7 days
7 days
1
3
40
8
The total amount of General Loans is Rp.8 billion, or 41.9% of the total portfolio in April 2006. The loans were
extended for working capital, trading, service industries, home appliances, house renovation, education,
agriculture, chicken breeding and poultry etc. The tenor of the loans is up to 48 months. Loans extended to
finance agriculture businesses and chicken breeding & poultry are paid at the harvest time. The management is
aware of the risks related to loans extended to farmers; therefore Kopdit requires additional collateral from the
borrowers.
Kopdit also extended large amount of loans to Korporasi (cooperatives & companies), up to Rp.8.2 billion or
42.5% of the total portfolio as of April 2006. All large loans are secured with collateral in the form of land or
buildings. These loans were booked with approvals from BOG and BOS and reported in the Annual Members
Meeting.
ACCU introduced a program to empower low-income people called CUMI (Credit Union Microfinance). In this
program, ACCU provided financing for the costs of training, administration and staff to monitor the progress of
the program while Kopdit extended loan funds from its own sources. This program was discontinued due to the
high cost involved.
For customers located in more remote areas, Kopdit provides a transfer and clearing service through Bank
Central Asia (BCA) E-banking.
Kopdit joined the Dana Perlindungan Bersama (Daperma), a kind of internal credit union for life insurance, for
which it secured a loan with maximum refund of Rp.35 million which also provides benefits of maximum Rp.20
million for savers.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
7
MFI Appraisal and Recommendation Report
Inst:
3
Max :
5
6. Clients and Social Performance
As of April 2006, Kopdit had1463 members and 1262 candidates for membership spread across 5 TPs. All
were located in the District of Pasuruan and the District of Malang and is surrounding areas. Total borrowers
are 1365, consisting of members and non-members located in the villages areas and/or in the vicinity of
Pasuruan and Malang. Average loan amount per member is around Rp.12 million, distributed in the economic
sectors of home industries, dairy farms, local transportation services and vegetables growing farmers. In TP
Tosari, 90% of the borrowers are vegetables farmers. The biggest number of savers and borrowers of these
sectors are micro entrepreneurs. It is the Kopdit’s intention to penetrate into the market where the biggest
number of small and micro businesses are and, at the same time, attract new members. Kopdit is also very
active in initiating and sponsoring the social activities in the villages within the districts to increase members.
Although Kopdit has discontinued the CUMI (Credit Union Microfinance) program sponsored by ACCU,
Kopdit still continues to provide loan for amounts smaller than Rp.1 million.
Inst:
7. Market Trends and Competition
Name of Institution
Commercial banks
1 Bank Rakyat Indonesia
2 BPD Jatim
3. Danamon Simpan Pinjam
BPR
4 BPR-BPR
Cooperatives, NGOs, etc.
5 Koperasi Susu Indonesia
6 More or less 20 units of
Koperasi Simpan Pinjam
4
Max :
5
Key
Products*
Interest +
Fees
Est. Market
Share
Location
Loan
Loan
Loan
21(effect)
21(effect)
21 (flat)
n/a
n/a
n/a
All Districts
Nongko Jajar and Malang
Nongkojajar and Malang
Loan
23 (Flat)
n/a
Surrounding Malang dan
District of Pasuruan
Loan
Loan
24(Effect)
24 (flat)
n/a
n/a
Nongko Jajar
All Districts
Market:
The Kopdit’s market is the area surrounding the district of Pasuruan and Malang and dominated by
agribusinesses, trading, services, home industries, and micro entrepreneurs. Residents of the area are
economically active. Although the Kopdit has a strong position in the 3 TPs and the others are developing,
there are still many areas that have not been tapped by Kopdit. A few of them do not have any financial
institutions, like cooperatives, BPR, BMT or commercial banks. Kopdit is now concentrating on areas that have
less financial institutions to increase market shares and the number of members. Potential areas for Kopdit to
expand include Nongkojajar, District of Tutur, Gunung Kawi, Kepanjen, Turen, Kalipare and Pakis. The area
that Kopdit maintains a major share of the villages surrounding the TP Tosari, in which there are no other
financial institutions available. In addition, by end of 2006, Kopdit plans to open a new TP in Ngadisari.
Competition:
Surrounding the Kopdit TPs, there are more or less 20 Simpan Pinjam Cooperatives, BPRs, Bank Rakyat
Indonesia Bank Pembangunan Daerah Jatim and commercial banks.
Kopdit is now focusing their operations on increasing the economic power of low-income people. The Santo
Yoseph College Foundation, which has a strong and high commitment to improve the economy of the lower
economic strata, supports the activities of Kopdit.
The products of Kopdit meet the demands of the members and customers. The interest rate on savings products
is higher (loan is lower) than other financial institutions. At the end of the year every member will receive a
profit sharing (Divident-SHU). In addition, Kopdit also provides cash pick-up and delivery services, not only
for saving accounts but also for loan repayment. Currently, no competitors can compete with these advantages.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
8
MFI Appraisal and Recommendation Report
8. Human Resources Management:
Inst:
4
Max :
5
As of April 2006, the Kopdit had 22 staff, including the General Manager and 5 TP Managers. Seven people
are fully dedicated to the Loan Officer function. In each TP, at least 3 people are assigned to manage the TP,
the General Manager, the Loan Officer and administration staff. Most of the Kopdit Staff are educated from
the local university and have been working with the Kopdit for more than five years.
The standard salary, benefits and facilities for staff in Kopdit are higher than other similar institutions.
The lowest staff salary is bigger than UMR (regional minimum wage set by Provincial GovernmentRp.700.000. - per month) and get a meal allowance. In addition staff also receive a variety of allowances,
depending on their position and time the staff have been working with the Kopdit. These extra benefits include
allowances for medical, retirement, food for the family.
The current staff structure is considered sufficient to support the development and possible growth in the near
future.
The Standard Operating Procedures for Human Resources Management are already in place and being used for
day-to-day activities. Job descriptions for each function have been made and have been widely communicated
to the person holding the position. Periodically, performance appraisals for each individual are conducted and
are being used for the basis of salary increases.
Staff recruitment is done through advertisement in the local newspaper, with minimum educational background
of the applicant as university graduates (S1). Candidates undergo several tests and a probationary period for 3
months and if passed, will be extended for another 1 year then becoming a permanent employee. Decisions to
change the employment status are made by the General Manager.
Staff training is coordinated by Inkopdit (tertiary cooperative). Kopdit allocates funds for staff training, around
5-8% of the total staff expenses, every year. Furthermore, from time to time, Kopdit continues sending their
staff to other credit unions and cooperatives in Java and Kalimantan for survey and training.
The working environment and conditions in the Kopdit is quite good. Morale of the staff is high and there is
open management and communication among the staff and the managers. Good relationships with other
members and customers are maintained.
9. Management Information Systems
Inst:
3
Max :
5
Kopdit is using the Sikopdit system for Accounting and their Management Information System developed by
Inkopdit. The system is quite adequate for booking loan and saving transactions. It has the capability to produce
loan tracking reports and aging schedule reports as well as a listing of the borrowers and savers. However, the
system only produces loans in arrears for a period 1-12 months and 1 year and above (in line with PEARLS
requirements). The system is not able to produce reports of unpaid loans of 1 month, and/or two and /or three
month. This has caused information regarding the period of delayed payment of the obligated amount to not be
precisely determinable and the total amount of reserve for loan losses will be different from amount it should be.
The information related to loan in arrears for a period of 1, 2, and 3 months are made manually.
The security system of the MIS is not properly designed and exercised. Kopdit applied the User ID and
password for each operator, but control over the security level is not implemented. As the result, all staff may
have access to all data and information without regard to the function and level of the staff involved.
The system is unable to back-up data and information through the system. Data and information back up is done
manually by copying and transferring to flashdisk which is then kept by the General Manager. In addition,
Kopdit maintains a hard copy backup. Kopdit does not have an MIS operation manual or user guide.
However, Kopdit realizes that the current MIS is not flexible and may not be able to support the development
and growth of Kopdit. Therefore, Kopdit has made an arrangement with local provider, Global Net, to install a
new MIS, which will fulfill the needs of Kopdit in order to support the development and growth. The process of
conversion have been started.
Kopdit does not have a Disaster Contingency Plan to handle any problem that may occur in the hardware or
software. Dependency toward the system programmer is too high. Kopdit has to call the Sikopdit programmer
in the case of emergency, program revision, recovery, and corrective action, all situations that are frequently time
consuming.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
9
MFI Appraisal and Recommendation Report
10.
Internal Control Systems
Inst:
3
Max :
5
In accordance with the structure of organization of the Kopdit, it is the Board of Supervision’s (BOS)
responsibility to carry out the overall internal control functions independently. However, the quality and the
coverage of the audits is very limited, and is not covering the key and important aspects of the Kopdit operations,
such as strategic issues and policies, problem loans, amount of loans made, and the limited capabilities of MIS.
The audits are not in-depth or conducted in very perfunctory manner. The methods of the audit needs to be
improved.
In addition to the above, the General Manager assigned one of the senior staff to do the internal control function
covering all the TPs. The findings of the internal control report to the management and corrective actions are
taken on the spot. The designation of the staff may help the management but considered not independent. With
the size and total number of TPs, the Kopdit would be in a better position if they appointed a specific unit or a
senior individual to carry out the overall internal control functions in an independent manner. Furthermore, a
written manual for internal control/audit and a periodic audit program have not been set up as per the guidance of
the BOS.
All loans must be approved by the credit committee before disbursement. The credit committee at the TP level
consists of TP’s Branch Manager and Loan Officer. They are able to approve loans of IDR 10 million and
under. For loans from IDR 10 million to 75 million, the TP’s credit committee and the General Manager must
approve. For loans over IDR 75 million, the TP’s credit committee, the General Manager and General Board of
Governance (assembly) Meeting must approve.
The Kopdit already has an accounting manual which was written by INKOPDIT (tertiary Cooperative) in 1994
and it’s widely used as a standard for credit unions and cooperatives. Even though the manual has covered the
basic control system in processing accounting transactions (built-in control), several important aspects are not yet
covered.
In general, the awareness of staff toward the control is low and weak. The control over the customer documents
which are sensitive to forgery are not maintained or placed in a locked filing cabinet.
The process of analyzing the credit proposals is considered not comprehensive. The analysis of customers’
businesses, financial condition and performance, the appraisal of the collateral and the customer capability for
the repayment of loans were not thoroughly done.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
10
MFI Appraisal and Recommendation Report
IV.
FINDINGS: FINANCIAL PERFORMANCE
1. Quality of Information and Analytical Adjustments
Inst:
3
Max :
5
Overall quality of information presented in the Kopdit balance sheet and income statement is reliable and
accurate. The financial reports are made in accordance with the Indonesian accounting standards. The database
is able to produce a balance sheet and income statements on a dailly basis. But, the monthly consolidation of the
balance sheet and income statements from all TPs is done manually.
The financial reports are reviewed by the managers daily. All transactions are done on a cash basis with the
exception of depreciation of fixed assets and inventories, which is done on a monthly basis. The reserve for loan
losses is booked annually and coincides with the disbursement of profit (SHU). The Kopdit allocates funds for
reserves for credit risks, and general reserves first from SHU then the remaining balance is distributed to
members.
The MIS does not have the capability to produce portfolio reports in the form of separate groups of loans in
arrears together with the respective oustanding balances. To get information on the loans in arrears on a month
by month basis, the credit administration unit prepares a list of unpaid loans and the respective outstanding
balances. Now Kopdit is doing this on a daily basis, manually.
Although manually, through the customers loan cards, the history of each loan could be tracked from the day of
disbursement or the first day the loan was classified to the time the loan was fully repaid, or written-off.
The allocation of Head Office Expenses, Human Resources expenses and Cost of Funds used by TPs have not
been implemented and charged to TPs books. This has resulted in the inaccurate view of the profit and loss of
each TPs.
Kopdit is consistently using the accounting manual written by Induk Koperasi Kredit Credit Union (tertiary
cooperative) as the Standard of Operating Procedures (SOP) for daily operational activities.
As part of this rating, an analytical adjusment based on the international standards and best practices was made.
As a result of an adjusment of the reserves for loan losses, the ratio of AROA and AROE showing a negative
figures (see Attach 2.3 for details ).
Inst:
2. Portfolio Quality
Portfolio Quality
Average gross portfolio (IDR '000)
NPL
PAR (>1)
PAR (>30)
Write-off Ratio
Dec-03
7,605,615
4.21%
20.21%
16.27%
0.00%
Position
Dec-04
9,045,511
2.69%
17.65%
12.65%
0.33%
Dec-05
14,074,524
2.07%
20.79%
14.15%
0.00%
5.78%
2.82%
2.42%
0.00%
110.72%
207.38%
NA
0.00%
0.00%
9.02%
6.41%
13.53%
10.05%
NA
NA
83.97%
71.02%
74.23%
-15%
0.00%
74,546
0.81%
76,732
1.42%
121,093
Adjusted Write-off Ratio
Adequacy of reserve (to BI regulationexcluded collateral calculation)
Adequacy of reserve (to CGAP)
Risk Coverage Ratio
Adjusted Risk Coverage Ratio
Loan Loss Reserve
BI LLR Requirement
3
Max :
5
Trend
Sources of ratios
03-04
04-05
19%
56%
-36%
-23% Non performing loan based on BI standard
-13%
18%
-22%
12%
0%
0% Write off recorded by client / average gross outstanding portfolio
(Write off based on CGAP standard + Write off recorded by client) / average
-51%
-14%
gross outstanding portfolio
NA
2.93%
87% Loan loss provision / provision required by BI
50% Loan loss provision / provision required by CGAP
56.82% Loan loss provision / outstanding loan with PAR > 30 days
4.51% Loan loss provision based on CGAP / outstanding loan with PAR > 30 days
75.47% Loan loss provision / gross outstanding loan
57.81% Loan loss provision based on BI standard
The Quality of Portfolio is considered acceptable. NPL or Portfolio at Risks is considerably low.
To date, there is no standard for measuring Non Performing Loans (NPL) issued by the Department of
Cooperatives to be used by all cooperatives in Indonesia. Kopdit is using the standard of PEARLS to measure
NPL.
Follow up on the collection of the loans in arrears is done minimally. Kopdit provides a one-month period
allowance for any loan in arrears until the process of collection is made. The system will produce a report when
loan is unpaid after a period of one month to more than one year. Loans in arrear less that one month are not
reported. Currently, the status of Portfolio at Risks (using CGAP method) showing a PAR > 1day is as high as
20 % and PAR >30 as high as 14%
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
11
MFI Appraisal and Recommendation Report
In accordance with the PEARLS method of calculation for reserve for loan losses, the reserve is 35% of the total
outstanding loan in arrears of one day to one year. For unpaid obligations of more than one year the reserve
should be 100% of the total amount of unpaid loans. Kopdit has complied with this requirement, following the
PEARLS method. However, when calulating NPL in accordance with Bank Indonesia regulation and/or PAR
(International Best Practice–CGAP), the current amount of reserves is far less than sufficient. The total amount
of all reserves (adding up all balance in the accounts of Reserve for Loan Losses, Reserve for Credit Risks, and
General Reserve) as of December 2005, only covered 10% of the required amount of reserves for Loan Losses.
In May 2006, Kopdit wrote-off loans which had been unpaid for more than one year, for an amount of Rp. 250
million. The write-off brought down the PAR >30 to the level of 12.22%.
The trend of problem loans for the last three years tended to be stable (PAR>30 : 16% ; 13% and 14%) The
economy surrounding the area of operation has not fully recovered, especially with the increased of oil price in
2005.
The SOP for the loan booking and processing has not been set up by Kopdit. Only recently Kopdit issued a
procedure memo regarding the loan refinancing, reschedulling and write-off.
Inst:
3. Asset and Liquidity Management
Des-03
Asset composition
Total liquidity reserves
Long term assets to total assets
Capacity ratio
Other short term assets to total assets
Financing for Portfolio
Loan to Deposit ratio
Purchased funds dependence
Commercial portion to loan
Subsidized portion to loan
Liquidity Management
Cash Position Indicator
Liquid Ratio
Quick Ratio
Position
Des-04
Des-05
Trend
03-04
04-05
18,67%
6,20%
74,96%
0,17%
12,23%
7,73%
80,02%
0,02%
5,06%
8,61%
86,30%
0,03%
-35%
25%
7%
-86%
93,72%
0,00%
0,00%
0,00%
119,61%
9,40%
9,40%
0,00%
165,32%
27,74%
27,74%
0,00%
28%
NA
NA
0%
18,67%
114,06%
22,71%
15,05%
130,91%
17,35%
7,87%
164,87%
9,13%
-19%
15%
-24%
3
Max :
5
Sources of ratios
-59% Cash and cash equivalents / total assets
11% Other long term assets and net fixed assets / total assets
8% Net portfolio loan / total assets
25% Other short term assets / total assets
38% Gross loan portfolio / savings, deposits, interbank liabilities
195% Interest bearing borrowings/net outstanding loan
195% Commercial interest bearing borrowings/net outstanding loan
0% Subsidized interest bearing borrowings/net outstanding loan
-48% Average cash and cash equivalents/average total assets
26% Current assets / current liabilities
-47% Cash and cash equivalents / current liabilities
The management’s handling of the assets is fairly acceptable. Large loans are properly secured. Although still
in manual fashion, Kopdit is able to maintain day-to-day liquidity needs accordingly. Procedures for liquidity
management have not been written-off and no cashflow projection has been prepared. Kopdit only prepares the
day-to-day liquidity needs based on the customers loan cards and the certificate of deposits issued, manually.
To fulfill the liquidity needs, Kopdit borrowed funds from Puskopdit, other financial institutions, and the
cooperatives, Koperasi Serba Usaha Pointer, Server Finance, Bintang Samudra and Yayasan Kosayu. Total
borrowing to third parties as of April 2006 was Rp.4 billion. This amount represents 30,5% of the Kopdit’s
overall short-term third party funds.
Kopdit made a reserve in the form of cash with a minimum of Rp.1 billion, The quick ratio tended to reduce the
figure down from 22.71% in 2003, 17.35% in 2004 to 9.13% in 2005. With a good liquidity monitoring system,
the cash may be invested in a more productive ways, or be used to make a partial repayment to the high interest
loan to third parties.
The loan to deposit ratio for the last three years indicates a upward trend from 93.72% in 2003, 119.61 % in
2004 to 165.32% in 2005. The increase of loans booked was not followed by a similar increase in savings and
deposits. The loans booked were financed by the commercial borrowing funds from third parties (27.74% of total
assets). The interest rate of commercial funds is more expensive than the interest paid to savings and deposit
accounts.
No policy and procedures of assets management is available. The loan accounts are dominant, having increased
from 75% in 2003, 82% in 2004 to 86% in 2005, of total assets, with an average loan period of 24 months. Fixed
assets represent 9% and cash 5% of total assets.
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
12
MFI Appraisal and Recommendation Report
Inst:
4 Liabilities and Equity
Equity
Debt to Equity
Savings and Deposits to total debt
Purchased funds to total debt
Capital Adequacy Ratio
Debt to Total Assets
Equity: Shares
Equity: Donations
Equity: Retained earnings/losses
Equity: Other sources (specify)
Subsidized Commercial Funding
Liabilities Ratio*
Commercial Liabilities
Non-Commercial Liabilities
Portfolio to Total Assets
Deposits to Total Assets
Cost of Funds Ratio
Adjusted Debt to Equity
Trend
Dec-05
03-04
04-05
3.85
-23%
8%
66.72%
-11%
-23%
30.16% NA
213%
22.74%
15%
-13%
1,260,418
9,189
8,682
0.00%
1,955,998
9,189
138,189
0.00%
2,725,069
55%
39%
9,189
0%
0%
337,619
1492%
144%
NA
NA
0.00% NA
NA
74.96%
79.99%
17.00%
11.88
8.83%
977,603
80.68%
67.45%
16.59%
7.87
17.15%
18.14%
11.32
16.38%
5.83
2005
2004
Equity
Loan
subsidized
Loan
commercial
Time
Deposits
2003
Savings
5
Position
Dec-04
3.55
86.47%
9.64%
26.17%
Financing structure
Amount
Max :
Dec-03
4.63
97.26%
0.00%
22.66%
Adjusted CAR (after weighted assets)
Funding Expense Ratio
Equity Multiplier
14.000.000
12.000.000
10.000.000
8.000.000
6.000.000
4.000.000
2.000.000
-
4
4,830,914 NA
NA
87.54%
52.95%
19.01%
7.96
11.76%
17.06%
8.50
394%
NA
8%
-16%
-2%
-34%
94%
9%
-21%
15%
1%
-31%
-10%
-49%
4%
46%
The growth of saving accounts and time deposits
funds in 2005 was 21%. The growth of basic &
compulsory savings was around 45%, and retained
earnings booked as general reserve accounts was
140%, making the total growth of equity 41%. Even
so, there is a wide difference between funds for loan
disbursement and funds received from savings and
deposits. To fill the gap, Kopdit has to borrow funds
from third parties at a high interest rate (21% p.a.)
Financing sources
As presently run, the borrowed funds comprise
27.74% of total assets. As a result, the cost of funds
rose from 15% in 2005, to 19% by April 2006. Kopdit plans to borrow from a commercial bank at the
commercial bank rate for replacing the funds borrowed to third parties and for working capital.
Each year, Kopdit extends profit sharing to members. In December 2005, Kopdit paid profit sharing (SHU)
totaling Rp.837 million. The Capital Adequacy Ratio of Kopdit as of April 2006 was 22.7%.
The ratio between portfolio and equity is 3.79 times or 379%. And the ratio between problem loans and equity is
37.29%. With the current capital structure, Kopdit has sufficient capacity to support the current business risks.
Especially with the opening of the new TPs in Dinoyo and Ngadisari. The new TPs may register new additional
members, and will increase basic and compulsory savings. This will help to increase the equity.
5. Profitability
Profitability
Operational Sustainability (OSS)
Inst:
Dec-03
100.45%
Position
Dec-04
106.52%
Dec-05
110.09%
2
Max :
Trend
03-04
6%
Sources of ratios
04-05
3% Operating income / operating expense
Adjusted Return on Assets (AROA)
-10.75%
-7.32%
-10.07%
32%
-38% Adjusted net income / average total assets
Adjusted Return on Equity (AROE)
-60.55%
-36.37%
-47.61%
40%
-31% Adjusted net income / average equity
0.09%
0.48%
1.19%
5.93%
2.04%
9.62%
1296%
1131%
Yield on gross loan portfolio
25.11%
24.52%
23.83%
-2%
-3%
Theoritical interest rate
42.57%
43.58%
37.87%
2%
-13%
Yield gap ratio
41.02%
43.73%
37.08%
7%
-15%
Return on Assets (ROA)
Return on Equity (ROE)
Net Income/loss (IDR '000)
Total value of loans disbursed during the
period (IDR '000)
Value of repayments received (IDR '000)
Net Profit Margin
Financial and Operating Expense Ratio
Financial Expense Ratio
Financial Sustainability (FSS)
BOPO
Financial Cost Ratio
Total expense to average total assets
70% Net income / average total assets
62% Net income / average equity
8,682
138,189
337,619
1491.64%
144.32%
4,427,004
7,001,626
14,458,480
58.16%
106.50%
3,659,627
0.45%
25.40%
18.14%
64.01%
99.55%
14.52%
19.04%
5,664,588
6.12%
23.45%
16.38%
72.72%
93.88%
13.73%
18.33%
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
5
7,775,566
9.16%
23.78%
17.06%
68.79%
90.84%
15.61%
20.17%
54.79%
1267%
-8%
-10%
14%
-6%
-5%
-3.75%
Interest income from loan and provision, commission
income/ average gross loan portfolio
1-(yield on gross loan portfolio/theoritical interest
rate)
37.27%
50% Operating profit / operating income
1%
4%
-5%
-3%
14% Interest expenses / average performing assets
10.07%
13
MFI Appraisal and Recommendation Report
Note: see annex 2.3 for detailed adjustments
For the last three years, Kopdit has been able to increase profits from operational activities. However, the
yield’s trend are decreasing slightly due to Kopdit’s need to pay a high interest expenses on commercial loans.
The net profit booked in nominal amounts is continues to climb upwards.
At month-end, Kopdit allocated a certain percentage of operational profits to the general reserve account,
reserves for credit risks account, and expense payables account. At year-end, the balance of net profit account
added up with the balance of expense payables account, and was then distributed to pay/ reimburse a certain
activities of Kopdit including honorariums for the governing board members, expenses for annual members
meeting, and profit sharing for Kopdit members. In fact, the profit generated from operational activities is bigger
than it shown in the net profit account (SHU).
The profit generated by Kopdit is more than the amount recorded on their balance sheet. Every month, for
unknown reasons, a certain amount of the profit is transfred to the expense payable account and other reserve
accounts. Furthermore, Kopdit still has the prospect of increasing their revenue by intensifying the effectiveness
of collection of unpaid borrowers’ obligations.
6. Operational Effectiveness
Inst:
Des-03
25,40%
Position
Des-04
23,45%
Operating Expense Ratio
7,27%
7,07%
Yield on Gross Portfolio
25,11%
24,52%
2.089
185
532
8.222
101,17%
4.388
885.401
4.427.004
NA
2.012
211
652
9.948
95,62%
4.597
1.400.325
5.714.315
13,95%
Efficiency and Productivity
Financial and Operating Expense Ratio
Cost per Active Client (IDR '000)
Loan Officer productivity
Savers per Client Officer
Average Outstanding Loan Size (IDR '000)
F&OER to Yield on Gross Portfolio
Loan Disbursed per borrower (IDR '000)
Loan disbursed per Loan Officer (IDR '000)
Average Loan Disbursed (IDR '000)
Client Turnover
5
Max :
5
Trend
Des-05
03-04
04-05
Sources of ratios
23,78%
-8%
1% Financial & Operating expense / average gross loan portfolio
Human resource, administration, depreciation expense / average gross
6,72%
-3%
-5%
loan portfolio
Interest income from loan and provision, commission income/ average
23,83%
-2%
-3%
gross loan portfolio
2.451
-4%
22% Operating and non-operating expense / active borrowers
273
14%
30% Active borrowers / loan officer
684
23%
5% Active savers / client officers
12.940
21%
30% Gross outstanding loan / active borrowers
99,79%
-5%
4% Financial & Operating expense ratio / yield on gross portfolio
6.928
5%
51% Loan disbursed / number of loan disbursed
2.891.696
58%
107% Loan disbursed / number of loan officers
10.730.053
29%
88% Loan disbursed / number of loan disbursed
29,51% NA
112%
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Other Expense
General &
Administrative
Expense
Salaries &
benefit expense
Banks' loan
interest
expense
Loan loss
provision
expense
Interest and fee
expense
Kopdit operations show a good, profitable trend. Loan Officers’ productivity is considerably high.
The structure of Kopdit’s expenditures is considered proportionate. The interest expense is 72% of the total
operation expenses. In order to enhance services rendered to customers, Kopdit has recruited three more staff
and assigned in TP Dinoyo and Sawiran as Loan
Expense distribution
Officers.
The management is aware of the limited capabilities of
6.000.000
the previous MIS, and the new MIS has then been
5.000.000
Des-05
4.000.000
installed. The programs are designed to meet the needs
3.000.000
Des-04
2.000.000
of the Kopdit. Since the MIS is just newly used, it has
Des-03
1.000.000
not yet been proven cost effective.
Considering several factors such as improving
management capacity with continuous training, new
recruitment of personnel with good basic educational
backgrounds, training and on the job training, an
increase loan officer productivity, entering new
markets, developing existing markets, high capability and custom designed MIS, Kopdit may have sufficient
capacity to support future growth.
14
MFI Appraisal and Recommendation Report
V. FINDINGS: BUSINESS PLAN AND STRATEGY
Score:
Inst:
1. Business Plan and Budgeting
3
Max :
5
Kopdit has not made a business plan and budget for medium term, 3-5 years ahead. The work plan made by
Kopdit only covers 2006. The plan only covers for organizational work plan and is very limited on the
business side. Kopdit has not made any detailed written plan to develop its business on a month-by-month
basis, to list the target markets to enter, to state branch opening, new recruitment, profit plan, or any action
plan to reduce dependency on the high interest rate loans to third parties, and to reduce large loans. There is no
budget to support the work plan, which should have been prepared on a month-by-month, account by account
basis, with detailed revenue and expenditures to facilitate the monitoring process and analyze variance between
actual versus budget.
Similar to the above, The Board of Supervision prepared a very simple work plan for 2006. It is unstructured
and not particularly detailed. A budget related to the work plan was not prepared. Kopdit’s focus has been
concentrated on cooperatives’ activities and on the development and improvement of members, and lacking of
business aspects.
Inst:
2. Financial Projections
3
Max :
5
Kopdit has no financial projections made for either 2006 or for the 3-5 years ahead. In their 2006 workplan,
Kopdit made projections of revenue and expenditures in a very simple way, with no details or underlying
assumptions. Revenue for 2006 was projected to achieve 160% of 2005 revenue, or and increase of 60% from
2005 revenue. Expenditure for 2006 was projected at 165% of 2005 expenditure, or an increase of 65% from
2005 expenditure.
Growth of revenue and expenditure is as follows:

Revenue in 2005 was Rp.3.385 million. Projection for 2006 is Rp.5.407 million.

Expenditure in 2005 was Rp.3.024 million. Projection for 2006 is Rp.4.996 million.
Assets were planned to grow to Rp.27 billion by the end of 2006. As of April 2006 the total assets were Rp.21,2
billion.
Revenue as of April 2006 was Rp.1.542 million or 42% of the 2006 budgeted figure. Expenditure as of April
2006 was Rp.1.398 million or 42% of the 2006 budgeted figure.
Kopdit does not make any projections in the growth of members, total savings, total loans, total value of bad
loans, value of bad loans that have been successfully collected, or total write-offs.
Kopdit has not projected total loans from a third party or commercial bank, interest rate charged, interoffice
loans or interoffice interest rate.
Category
Plan 2005
IDR (000)
Actual 2005
IDR (000)
Income
3.385.566
3.683.898
Variance
against Plan
2005
8,81%
Expense
3.024.043
3.346.279
10,66%
4.995.742
Saving
4.964.750
4.356.232
-12,26%
10.065.670
Deposit
6.593.618
6.328.473
-4,02%
7.372.772
Loan
18.916.959
17.663.640
-6,63%
25.583.886
Equity
3.958.031
4.161.939
5,15%
4.409.036
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Plan 2006
IDR (000)
5.407.404
15
MFI Appraisal and Recommendation Report
VI. SUMMARY
1.
KEY RISKS
Risk Areas
OPERATIONAL
Institutional Risk
Management /
Governance
Risk Level
Low
Medium
Product and Service
High
Management Team
Accounting/Finance Mgt
Management Information
system
Administration/HR
Fraud/Internal Control
Low
Medium
Medium
Medium
Portfolio Quality
Medium
Medium
Medium
Tax/Legal
PLAN + STRATEGY
Donor Dependency
Collateral/Guarantee
Projections
Kopdit has not implemented inter office charges such as human resources
expenditures and cost of funds. SHU for each TPU did not reveal the accurate
figure. It is recommended to get staff trained in accounting and set a “Base
Rate” as cost of internal fund.
PAR has been relative high (14%); no definite staff has been assigned to take
care of troubled loans. It is recommended to take “Delinquency Management”
training.
Kopdit has not had any control tools to monitor liquidity requirement for a
month ahead, reducing deposit and loan gap, to lessen dependency toward
commercial fund with high interest rate. It is recommended to take “Liquidity
Management” training.
Loan to Deposit Ratio was relatively high (165%). Increasing third party funds
by increasing the number of new member and expanding to new market.
Commercial loans with relatively high interest rate of up to 45% of the total
third party liabilities. It is recommended to mobilize funds or to look for low
cost funds as a substitute.
-
Low
High
Inability to invest
Lack of growth
Inability to increase
Equity
Kopdit has no independent officer that implements the internal control function
and internal audit function. It is recommended to take training on “internal
control/audit”
Low
Medium
Asset Liability
Management
Liability Structure
The Kopdit accounting system should fully implement Indonesian PSAK.
The system currently in use is not flexible enough and has limited capability to
generate modified report. Kopdit was in the process of changing its information
systems with provider, Global Net Malang.
Low
FINANCIAL
Information Quality
Capital Adequacy
Liquidity
The BOD does not have enough experience in finance and legal affairs. It is
recommended to take courses and training on Financial Analysis, Business
Plan, Accounting, & Cooperative Law, or recruit personnel that have thorough
knowledge of such issues as advisors to the BOD.
Most loans extended were company loans. Credit analysis procedures and
process to determine creditworthiness, very large loan nominal, and evaluation
of collateral do not meet best practice standards. It is recommended that Kopdit
staff take training on Credit Analysis, Collateral Evaluation, and limit the value
of loans that could be extended by Kopdit.
Low
Medium
Competition/Market
Planned Steps to Address Medium to High Risk
Kopdit has not made any business plan & financial projection for mid term
period (3-5 years). The annual workplan does not detail their business plan,
revenue and expenditure projections. It is recommended to get business,
strategy and financial planning training.
Low
High
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Kopdit has not made any business plan & financial projections for the mid term
period (3-5 years). The annual work plan does not detail their business plan,
revenue and expenditure projection. It is recommended to get business, strategy
and financial planning training.
16
MFI Appraisal and Recommendation Report
2.
RECOMMENDED LOAN PRODUCT
Total Amount
Loan Type
Term
Grace Period
Repayment Schedule
Interest Rate
Fee
Guarantee provided by MFI
Guarantee provided by Mercy Corps
IDR 2.5 billion
Installment loan
3 years
Every 3 months
16% p.a.
80%
20%
Description of MFI Guarantee
Additional Comments on Purpose Loan
 Kopdit requires fund of Rp,2,5 billion that would be used to fund as follows:
1. To repay high interest rate commercial loan outstanding for the amount of Rp.1,5 billion.
2. Working capital reserve of Rp.1.billion.
 To reduce down corporation loan (with nominal of more than Rp.200 million)
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
17
MFI Appraisal and Recommendation Report
VI.
1.
ANNEXES
Organizational Structure:
RAPAT ANGGOTA
Penasihat
Romo Willy CDD
Romo Sukamto CDD
PENGURUS
Ketua : Drs. Sugeng S.
Wakil : Sugondo
Sekretaris : Susilomurti
Bendahara : Maria Tatik
Anggota : H. Samanhadi
Anggota : Yovita
Anggota : Budi Cahyono
PENGAWAS
Ketua : H.M.Iksan S.Pd
Wakil : Drs. Sutikno
Anggota : Devi Ika
Manager Umum
Kokok Budianto
Asisten Internal Audit: Daniel
Asisten Promosi & pendidikan Suharianto
Asisten Kredit: Melina
Manajer TP Sawiran
Mgr TP Tosari
Mgr TP Kepanjen
Mgr TP Capang
Mgr TP Pakis
Setya Edi
Heri Susanto
Widi Hatmanto
Suharianto
Budi
Melina (Kantor)
Alif K (Kantor)
Daniel (Kantor)
Wiwik (Kantor)
Ike (Kantor)
Tirto (LO)
Jarot (LO)
Anton (LO)
Gelar (LO)
Suwarno (LO)
Bachtiar (LO)
Totok (Keamanan)
Diah Ika (LO)
Warsono (Keamanan)
Bawon (Keamanan)
Jl. Kemang Selatan I No.3, Bangka | Jakarta Selatan 12730, Indonesia | tel 62.021.719.4948 | fax 62.021.7179.0907
Version 3.2 as 3/6/2016
MFI Appraisal and Recommendation Report
2.
2.1.
Financial Statements
Balance Sheet
ASSETS
Cash and due from banks
Total loan portfolio
(Loan loss reserve)
Other short-term assets
Other long-term assets
Net Fixed assets
TOTAL ASSETS
LIABILITIES
Savings Accounts: compulsary
Savings Accounts: voluntary
Time deposits
Interbank liabilities
Loans: commercial banks
Loans: subsidized
Loans: Shareholders' Loan
Other short-term liabilities
Other long-term liabilities
TOTAL LIABILITIES
EQUITY
Paid-in equity from shareholders
Additional capital
Donated equity -- prior years, cumulative
Donated equity -- current year
Prior years retained earnings/losses-dividend
Current year surplus (deficit)
Other capital accounts
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
2.2
31-Dec-04
(IDR 000)
1,589,121
10,485,407
(84,958)
3,006
31-Dec-03
(IDR 000)
1,894,528
7,605,615
16,819
31-Dec-05
(IDR 000)
1,021,184
17,663,640
(251,127)
5,830
628,885
10,145,847
1,004,146
12,996,723
1,737,562
20,177,089
2,023,896
6,091,260
228,787
8,343,943
3,100,322
5,665,920
977,603
394,452
10,138,296
4,356,232
6,328,473
4,830,914
499,531
16,015,150
1,260,418
523,615
9,189
(0)
8,682
1,801,904
10,145,847
1,955,998
755,050
9,189
0
138,189
2,858,426
12,996,723
2,725,069
1,090,062
9,189
0
337,619
4,161,939
20,177,089
Income Statement
OPERATING INCOME
Interest and fee income from loans
Income from investments
Income from other finance-related services
Total Operating Income
FINANCIAL EXPENSES
Interest and fee expense
Banks' loan interest expense
Loan loss provision expense
OPERATING EXPENSES
Salaries & benefit expense
General & Administrative Expense
Other Expense
Total Operating Expenses
NET OPERATING PROFIT (LOSS)
NON-OPERATING INCOME & EXPENSE
Donation recorded as income
Other non-operational income
Other non-operational expenses
Total Non-Operating Income & Expense
TOTAL CONSOLIDATED PROFIT/LOSS (BEFORE TAX)
Tax income
TOTAL CONSOLIDATED PROFIT/LOSS
Donation recorded as capital
Donation for Loan Capital
Donation for Operating Expenses
Net Income after Donation
31-Dec-03
(IDR 000)
1,909,622
30,493
624
1,940,739
31-Dec-04
(IDR 000)
2,217,964
23,341
17,795
2,259,101
31-Dec-05
(IDR 000)
3,353,392
16,192
314,314
3,683,898
1,379,370
-
1,481,257
-
2,401,167
-
72,565
398,718
81,403
1,932,056
8,682
37,841
595,287
6,527
2,120,912
138,189
37,529
887,108
20,475
3,346,279
337,619
8,682
8,682
138,189
138,189
337,619
337,619
Jl. Kemang Selatan I No.3, Bangka | Jakarta Selatan 12730, Indonesia | tel 62.021.719.4948 | fax 62.021.7179.0907
Version 3.2 as 3/6/2016
MFI Appraisal and Recommendation Report
2.3.
Adjustment (IDR ‘000)
Adjustment Worksheet
Unadjusted Operating Expenses
Inflation Adjustment
a. Average equity
b. Average fixed assets
c. Inflation
Total Adjustment (a-b)*c
Subsidized Cost of Funds Adjusments
a. Average subsidized loans
b. Commercial interest rate
c. Commercial interest expense
d. Actual interest expense
Adjustment = c-d
a1. Average savings
a2. Average deposits
b1. Commercial rate for equivalent savings
b2. Commercial rate for equivalent deposits
c. Commercial interest expense
d. Actual interest expense
Adjustment = c-d
In-kind Donation Adjustment
a. Personnel
b. Other
c. Commercial interest rate
Adjustment = (a+b)*c
31-Dec-03
(IDR 000)
1,932,056
Year
31-Dec-04
(IDR 000)
2,120,912
31-Dec-05
(IDR 000)
3,346,279
1,801,904
628,885
5.16%
60,528
2,330,165
816,516
6.40%
96,874
3,510,183
1,370,854
17.11%
366,039
16.06%
-
14.31%
-
16.25%
38,713
-
2,023,896
6,091,260
4.06%
10.06%
694,951
1,379,370
-
2,562,109
5,878,590
2.31%
8.31%
547,696
1,481,257
-
3,728,277
5,997,197
4.25%
10.25%
773,164
2,401,167
-
0
16%
-
0
14%
-
0
0
16%
-
Loan Loss Provision
Write off
Other non-cash adjustment
599,849
439,430
1,039,279
663,667
225,030
888,696
1,302,178
340,484
1,642,662
Total adjustment
1,099,807
985,570
2,008,702
3,031,863
1,940,739
(1,091,124)
3,106,482
2,259,101
(847,381)
5,354,981
3,683,898
(1,671,082)
Adjusted Operating Expenses
Operating Income
Adjusted Net Operating Income (loss)
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
20
MFI Appraisal and Recommendation Report
4. Portfolio Information
Dec-03
1 T otal Nilai Pinjaman yang disalurkan selama periode ybs
Total value of loans disbursed during the period
2 T otal Jumlah pinjaman (akad) yang disalurkan selama periode ybs
Total number of loans disbursed during the period
3 Jumlah peminjam aktif sampai dengan akhir periode (orang)
Number of active borrowers (end of period)
4 Saldo Pinjaman
Value of loans outstanding (end of period)
5 Jumlah angsuran yang diterima selama periode tersebut
Repayment Value
6 Nilai pinjaman yang dihapuskan periode ini
Value of loans written-off during the period
7 T otal Nilai Pinjaman yang di rescheduling
Value of Reschedulling (reported)
8 Rata-rata jangka waktu pinjaman periode ini(Bulan)
Average loan term (months)
9 T otal Jumlah Penabung Aktif
Active Depositor
10 T otal Saldo T abungan & Deposito
Value of Client Savings & Deposits
11 Jumlah Staff periode ini
number of Staff during the period
12 Petugas lapangan periode ini (credit officer)
number of credit officers during the period
13 Jumlah Cabang (/ Kantor Kas Pembantu)
Number of Branch
(IDR '000)
(IDR '000)
Dec-04
Dec-05
4,427,004
7,001,626
14,458,480
1,009
1,523
2,087
925
1,054
1,365
7,605,615
10,485,407
17,663,640
3,659,627
5,664,588
7,775,566
(IDR '000)
0
29,642
0
(IDR '000)
0
31,791
38,394
(IDR '000)
23
26
28
2,662
3,261
3,422
8,115,156
8,766,241
10,684,705
15
15
16
5
5
5
5
5
5
Resiko Atas Pinjaman Portofolio (Loan Portfolio at Risk) as of 31December 2005
1
2
3
4
5
6
Periode tunggakan
Outstanding Portofolio (Baki
Debet)
Days past due
Outstanding Balance
Current loan
1-30
31-60
61-90
91-120
>120
T o t a l (T)
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
13,991,043,179
1,172,906,900
602,965,200
445,126,500
347,192,300
1,104,406,202
17,663,640,281
Portofolio Cadangan pinjaman
Beresiko
tak tertagih
Portfolio
at Risk
Loan loss reserve
(%)
(%)
0%
6.6%
10%
3.4%
25%
2.5%
50%
2.0%
75%
6.3%
100%
20.8%
Jumlah cadangan
pinjaman tak
tertagih
Loan loss reserve
amount
117,290,690.00
150,741,300.00
222,563,250.00
260,394,225.00
1,104,406,202.00
1,855,395,667.00
21
MFI Appraisal and Recommendation Report
5. Glossary
Ratio
AROE (Adjusted Return on Equity)
Formula
Adjusted Income/(Loss)
Average equity
AROA (Adjusted Return on Assets)
Adjusted Income/(Loss)
Average total assets
Adequacy of reserve in accordance
to Bank Indonesia regulation
Loan loss provision recorded by MFI
Loan loss provision that should be recorded
by MFI based on Bank Indonesia standard
Adequacy of reserve in accordance
to CGAP standard
Loan loss provision recorded by MFI
Loan loss provision that should be recorded
by MFI based on CGAP standard
Administrative expense ratio
Adjusted write off ratio
Average disbursed loan size
Average outstanding loan size
Human resource, administration,
depreciation expense
Average gross loan portfolio
Loan that should be written-off based on
PAR calculation
Gross outstanding loan
Explanation
Measures how well an MFI uses its
equities to generate returns that have
included CGAP analytical adjustments
Measures how well an MFI uses its total
assets to generate returns that have
included CGAP analytical adjustments
Indicated the performance efficiency of
MFI to produce the existing portfolio
To see the proportion of the written-off
loan based on CGAP standard to the total
outstanding loan
Value of loans disbursed
Total number of loans disbursed during
period
Gross loan portfolio
Number of loans outstanding
BOPO
Operating expense
Operating revenue
Measures the costs that used to generate
its related revenue
Capacity ratio
Net portfolio loan
Total assets
Measures the proportion of MFI’s net
portfolio loan out of its total assets
Cost per borrower
Operating expense
Average number of active borrowers
Current ratio/Liquid ratio
Cost of Fund ratio
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Indicates the efficiency of MFI’s
performance in term of the operating
costs that used to manage its existing
borrowers
Short term assets
Short term liabilities
Measures how well an MFI matches the
maturities of its current assets &
liabilities in general term
Interest + fee exp on funding liabilities
Average funding liabilities
Shows the blended interest rate for all of
an MFI’s funding liabilities (exclude
interest payable or interest on loans to
finance fixed assets)
22
MFI Appraisal and Recommendation Report
Capital Adequacy Ratio
Debt to Equity (Leverage)
Debt to Total Assets
Total equity
Average total assets
Total Liability
Total Equity
Total Liability
Total Assets (Liability + Equity)
Indicates on how much MFI’s liabilities
outperform its equities in its financing
structure
Measures the proportion of MFI’s
liabilities in its financing structure
Shows the blended interest rate an MFI is
paying to fund its financial assets. Can be
compared with Yield on gross loan
portfolio to determine the interest
margin.
Funding exp ratio
Interest + fee exp on funding liabilities
Average gross loan portfolio
Liquidity reserve
Cash and cash equivalents
total assets
Loan Loss Reserve
Loan loss provision
Gross outstanding portfolio
Indicates provisioning requirements on
loan portfolio for current period.
Gross outstanding loan
Savings + deposits + interbank liabilities
Measures how much MFI’s portfolio
financed by the third party’s liabilities,
which generally cost relatively low
Loan to Deposit ratio
Non-earning liquid assets to total
assets
Non-Performing Loan (NPL)
Operating expense ratio
Net fixed assets and other long term assets
Total assets
Non-current loan based on Bank Indonesia’s
standard
Gross outstanding loan
Operating expense
Average gross loan portfolio
OSS (Operational Self-sufficiency)
Operating revenue
(Financial exp + LLP + Operating exp)
Key indicator of efficiency of lending
operations.
Measures how well an MFI covers its
costs through operating revenues.
LLP = Loan-loss Provision
Operating revenue = Financial income
Purchased fund dependence
Productivity of excess cash
Profit Margin
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Liability financing other than savings,
deposits and interbank liabilities
Gross outstanding loan
Indicates how dependent a MFI is on
volatile sources to finance its portfolio
Cash in banks+short term investments
Interest income from investments
Net operating income
Operating revenue
Measures what percentage of operating
revenue remains after all financial, LLP
& operating expenses are paid.
23
MFI Appraisal and Recommendation Report
Loan officer productivity
Number of active borrowers
Number of loan officers
PAR ratio
Measures the average caseload of each
loan officer.
Portfolio at risk (>x days)
Gross loan portfolio
Personnel efficiency
Number of active borrowers
Number of staffs
Non-current loan based on CGAP standard, where all the delinquent loan that has passed due
its installment schedules, even if it is 1 day, should be categorized to Portfolio at Risk
Portfolio at Risk
Portfolio per loan officer
Outstanding portfolio
Number of loan officers
Indicates potential financial productivity
of loan officers.
ROA (Return on Assets)
Net Income / (Loss)
Average total assets
Measures how well an MFI uses its total
assets to generate returns.
ROE (Return on Equity)
Net Income / (Loss)
Average equity
Measures how well an MFI uses its
equities to generate returns
Risk coverage ratio
Loan-loss reserve
Portfolio at risk (>x days)
Yield on gross loan portfolio
Yield gap
Cash financial revenue from loan portfolio
Average gross loan portfolio
1-
Write-of ratio
Koperasi Kredit (Credit Union) SAWIRAN
Version 3.2 as 3/6/2016
Cash revenue from loan portfolio
(Net loan portfolio x Expected annual yield)
Value of loans written off
Average gross loan portfolio
A rough indicator of how prepared an
MFI is to absorb loan losses in the worst
case scenario.
Indicates the gross loan portfolio’s ability
to generate actual cash financial revenue
from interest, fees & commissions.
Compares revenue actually received in
cash with revenue expected from loan
based on its effective interest rates
Represents the percentage of an MFI’s
bad loans that have been removed from
the balance of gross loan portfolio.
24