From time to time, we highlight the most recent month's numbers and comment on an aspect of SafeSave's work.
The Eid festival fell in August and the offices were closed for four days. Nevertheless, savings rose again (by 1.3% over the previous month). Loans grew faster - by 3.6% over the previous month - as clients borrowed for the festival.
SafeSave's data management has been computerized from the opening day in 1996. The present system uses smart-phones carried into the field by our Collectors to manage transaction collection and data. The purpose-written software (by our software writers, QSoft, of Dhaka) contains checks to protect against fraud, to ensure that payments are credited to the correct account, and to provide a record of when each transaction was conducted. At the end of each transaction entry, the smartphone screen displays, in large Bengali script, the amount transacted and the resulting balance, so that clients can check that it is correct and tallies with their passbooks. The Branch Manager uses a smartphone to carry out a set number of monitoring checks in the field each month. Back in the branch, the smartphone data is uploaded daily to the branch PC, which updates all records and then downloads the results to the smartphones for the next day. The PC software carries out the full range of analyses required for monitoring, accounts preparation, and submission of data to the head office.
April again saw good growth of savings (2.7% up on the end-March figure and up 38% in a year) and another small fall in the loan portfolio.
One of the fastest growing parts of SafeSave's work is its Long Term Savings account (LTS). The LTS was introduced in June 2009 so it is now almost 3 years old. Clients use it to build savings over the long-term, by committing to a certain savings amount each month for a fixed number of months. In return, they get a good rate of interest on their savings. The interest is collected at the end of the term, along with the accumulated savings, to provide a large sum. But the financial lives of poor people are uncertain, so the LTS also provides the opportunity to borrow back the savings made, and repay month-by-month. Because these loans are fully backed by the savings, clients pay a low rate of interest on them.
Both the savings and the 'borrow-back' loans are popular with clients. By May 2010, at the end of the first year, during which the account was gradually introduced into all branches, LTS savings balances stood at 2.9million taka, at that time about 8% of the balances in the general savings accounts. A year later, in May 2011, the LTS balance was 9.6million taka, or about 22% of the general savings balance at that time. Now, at the end of April 2012, LTS balances have grown to 17.7million (about a quarter of a million US dollars), a figure which is about 35% of the general savings balance.
The corresponding numbers for the loans taken against LTS balances are as follows. At end May 2010 there was just 76,000 taka out in LTS loans, a tiny fraction of the huge general loan portfolio. By end May 2011 there was just under a million taka in LTS loans, or about 2% of the general loan portfolio. Now, at end April 2012, LTS loan balances amount to just under 2.5million taka, or a little over 5% of the general loan portfolio.
We are seeing, therefore, a steady shift in the structure of SafeSave's balance sheet, towards longer term savings and towards an even bigger part of the loan portfolio fully backed with client savings. As the current management sees it, this is a generally welcome development. It appears that many of our clients agree with us.
In March savings grew by 2.6% but loans declined slightly, so bank balances grew. Transaction volumes were good, as was income and profitability.
SafeSave's record over the past year shows 'operational self-sufficiency' (a measure of the degree to which all costs are covered by income) running consistently between 110% and 130% each month - that is, of income exceeding expenditure by 10% to 30% each month.
A key factor in efficiency is the number of clients served by each Collector (the staff who visit clients daily). In March each Collector served, on average, 233 clients. Revenue generated per Collector in the month came to 19,000 taka (about $240).
In SafeSave our measure of portfolio quality is the percentage of fees due that are collected in full in the month. In March that figure was 95.93% (in the best-performing branch, Gonoktoli, it exceeds 98%). We make provision in our accounts for the full value of loans held by clients who are in any arrears on any fees (including monthly service charges as well as loan interest), less any savings in their name held by us. The amount provisioned in this way at end March was 1.86 million taka (about $23,250) - but we held a 'loan-loss reserve' of 2.31 million taka, so we have a good cushion of reserves against possible losses. Our 16 year records show that on average we lose 1.7% of the value of all loans each year - a satisfactory figure.
The end of the month saw the ninth branch, Pirerbag, shift to new offices nearer to Kalyanpur with space to house the P9 Kalyanpur pilot product.
February was another satisfactory month. Once again growth in the loan portfolio (1.3% up on end-January) was surpassed by growth in the savings portfolio (up 3.3%). That brings the total savings portfolio to 67 million taka (about $830,000 at the current exchange rate - the taka has fallen sharply against the $ over the last few months). The loan portfolio is at about 51 million taka.
There were several new client registrations and active clients at the end of the month totaled 17,905. They are served by 81 Collectors, 18 senior branch staff and 6 head office staff.
The profit and loss account shows another healthy surplus for the month.
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