1. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Performance Standard and Rating

2. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 2 Performance Standards for Microfinance An assessment tool A management tool to improve the operational and financial performance. –To gauge compliance of bank staff with best practices –Useful for operations review. –Useful for setting performance goals A tool to enable comparison among MABS banks over time.

3. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 3 Financial Transparency Steps MIS Audits Assessment Performance stds. Rating Supervision

4. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 4 EAGLE Methodology Pass minimum certification requirements Audited financial statements & performance monitoring reports Ten quantitative indicators are scored on a scale from 1 to 5 Average Scores for each component are weighted Overall weighted score used for assigning three EAGLE grades : B, A and AA.

5. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 5 EAGLE Components E –Efficiency –20% A –Asset quality –40% G –Growth –10% L –Liability structure–10% E –Earnings –20%

6. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 6 Indicators ComponentIndicators Efficiency (20%)Direct admn.costs / avg. outstanding microloan portfolio Loan officer productivity: group and individual Asset Quality (40%)PAR > 7 days in % PAR > 30 days in % Growth in portfolio (10%)Growth in active clients Growth in loan portfolio outstanding Liability structure (bank wide) (10%) Deposits / Loan ratio Earnings (20%)Net revenue / avg. outstanding microloan portfolio

7. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 7 Indicators / scales 54321 Efficiency (weight = 20%) Costs efficiency ratio (%)  10 15-10.0120-15.0125-20.01  25.01 Loan officer productivity (no.)– group loans  250 249-200199-175174-150  149 Loan officer productivity (no.) – individual loans  120 120-10099-7574-50  49 Asset quality (weight = 40%) Avg. PAR (7 days) - %  5 5.01-77.01-99.01-11  11.01 Avg. PAR (30 days) - %  3 3.01-55.01-66.01-7  7.01 Growth in portfolio (annual) (%) – Weight = 10% Number of active clients (%)  20 15-19 10-14 1-9zero Volume of gross loan portfolio outstanding (%)  20 15-1910-141-9 zero Liability structure (bank wide indicator) – Weight = 10% Deposits / Loans (%)  100 80-9960-7945-59  44 Earnings (weight = 20%) Net revenue (%)  35 25-3415-2410-140-9 EAGLE Standards

8. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 8 EAGLE Grades AA: Overall weighted score of above 4.25 and no zero score for any individual component A: Overall weighted score between 4.24 and 3.5 B: Overall weighted score between 2.5 and 3.49 No rating: Overall weighted score less than 2.49. Excellent microenterprise finance performance Very good Average Below average performance

9. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating Sample Application of the Formula Period covered/rated: 12-month period January-December 2002

10. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 10 Efficiency ComponentFormula Costs efficiency Total direct oprtng costs (sum of Jan-Dec 2002) Avg gross loan portfolio (avg of Jan-Dec 2002) Loan officer productivity for Individual loans Avg # active borrowers (avg of Jan-Dec 2002) Avg # MF field staff (avg of Jan-Dec 2002) Loan officer productivity for Group loans Avg # active borrowers (avg of Jan-Dec 2002) Avg # MF field staff (avg of Jan-Dec 2002)

11. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 11 Asset Quality ComponentFormula PAR over 7 days Avg PAR amount (avg of Jan-Dec 2002) Avg gross loan portfolio (avg of Jan-Dec 2002) PAR over 30 days Avg PAR amount (avg of Jan-Dec 2002) Avg gross loan portfolio (avg of Jan-Dec 2002)

12. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 12 Growth # active borrowers, Dec. 31, 2002 - # active borrowers, Dec. 31, 2001 # active borrowers, Dec. 31, 2001 Growth in active clients Gross loan portfolio, Dec.31, 2002 - Gross loan portfolio, Dec. 31, 2001 Gross loan portfolio, Dec. 31, 2001 Growth in loan portfolio FormulaComponent

13. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 13 Liability Structure Total bank-wide deposits* at end-Dec. 2002 Total bank-wide loan portfolio** at end-Dec. 2002 Deposit to loan ratio FormulaComponent */Include all types of deposits **/Includes all types of loans.

14. © Copyright 2003 RBAP. All Rights Reserved. EAGLE Rating 14 Earnings Total fin. income (sum Jan-Dec ‘02) – Total fin. expense (sum Jan-Dec ‘02) – Total direct optng expn. (sum Jan-Dec 2002) Avg gross loan portfolio (avg of Jan-Dec 2002) Net Revenue FormulaComponent