Production & PAR Special Assistance Supervision (SAS) Introduction and Overview of Policy Developed in the Africa Region July 15, 2012

Special Assistance Supervision Quick Overview

Objectives Client Growth and Portfolio Quality (Production Standards Policy): Create clear, communicated performance targets for LOs Optimize performance levels in Growth and Portfolio Quality Enhance Performance Management and Staff Supervision Create a regionally standardized and comparable management & reporting structure. Arrears Management (PAR-SAS): Reduce the amount of time LOs spend in collection Ensure that BMs anticipates repayment issues and responds to PAR problems the day they occur Strengthen FINCA credit culture Achieve healthy business growth Enhance LO ownership and increase accountability

Definitions Minimum Production Standards – the minimum client numbers required for a LO of a given experience. If the LO is below the minimum Production Standards 3 days after the end of the month (Grace Period) then the LO will enter SAS. Exposure Limits – maximum number of clients or portfolio value that can be managed by a single LO Experience Months – the number of months an LO has worked following the 6 month probation period; each additional “experience month” carries a minimum and ideal number of clients which that LO must have. Performance Targets – the agreed goals set and agreed upon by the employee. These are the targets to be used for ongoing performance evaluation purposes on a weekly basis and for semi-annual performance evaluations.

Production Standards – SAS

Production Standards – SAS Summary Production Standards (PS) constitute the foundation of the performance target setting process for staff. Establish minimum performance standards. Outline monitoring, coaching and other management responsibilities. All LOs will be expected to meet or exceed the Minimum Production Standards. PS-SAS is designed to monitor the LO performance in terms of outreach (loan portfolio and clients). LO performance is monitored weekly and under-performance is addressed through 4 special assistance phases.

Production SAS Phases 1-2

Production SAS Phases 3-4 Red Phase: If, after 1 month in the Orange Phase, the LO has not met the minimum client production standards, then the LO moves to the Red Phase. LO then has until the end of the next month to achieve the minimum standard for total clients. LO must focus 100% of his/her effort on growth activities. LO shall receive all reasonable support from his/her Supervisor to achieve the minimum standards. Review Committee Phase: If the LO has still not met the Minimum Production Standards after the Red Phase, then he/she must attend a Performance Review Committee. Committee is comprised of the Supervisor, BM, COO, CM, and HRM. Committee must decide how to best manage the LO’s portfolio going forward.

Portfolio at Risk – SAS

Portfolio at Risk - SAS Summary PAR-SAS is designed to monitor how well a LO is managing the quality of his/her portfolio. All LOs must meet or exceed the existing PAR Standards, meaning that LOs must continue to maintain PAR >1 less than 5%. LO performance is monitored weekly and under-performance (PAR >1 greater than or equal to 5%) is addressed through 4 special assistance phases. PAR-SAS will always supersede PS-SAS. Time a LO spends in PAR-SAS Orange/Red phase shall not count towards their “Experience Months” (for client growth in Production Standards Policy)

PAR-SAS Phases 1-2 for VB

PAR-SAS Phases 3-4 for VB Red Phase: If PAR is not below the required limits after 1 month, then the LO moves into the Red Phase. Supervisor and LO must develop a detailed plan on how they will reduce PAR. Plan must be approved by the BM. LO will have weekly Supervisor Meetings with the Supervisor and BM. LO will be required to hold weekly VB Group Meetings with the 5 VB Groups with highest PAR in their LO portfolio. Review Committee Phase: If Committee is comprised of the Supervisor, BM, COO, CM, and HRM. Committee must decide on how best to manage the LO’s portfolio going forward.

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