Date Range
| PROFITABILITY RATIOS | |||||
| Ratio no. | Term | Value | Formula | Calculation notes | Use |
| R1 | Portfolio yield | 0% | Interest, fees, and commissions in loan portfolio/ Average gross loan portfolio | MFRS assumes that accrued interestreceivable is backed out or reversed if not received. As the ratio is calculated using averaging, it eliminates the effect of seasonal highs and lows. |
Indicates the MFI’s ability to generate cash from interest, fees, and commissions in the average gross loan portfolio. A decreasing trend means lower earnings in the portfolio, either from a change in product pricing, product portfolio composition, or foregone revenue due to rising arrears. |
| R6 | Impairment expense ratio | 0% | Impairment expense/ Average gross loan portfolio | This ratio can also be measured as a proportion of NPL30 with NPL30 in the denominator. | Measures the impairment expense as a proportion of the average gross portfolio, which represents the cost of credit-related losses or write-offs in the portfolio. Changes in this ratio may be due to changes in delinquency or to provisioning policies. |
| R7 | Operating expense ratio | 5,889.96% | Operating expense/ Average gross loan portfolio | Measures the administrative and overhead costs incurred to deliver loans. Declining trend, while a sign of an MFI’s improving efficiency, may also reflect a rising average loan size. | |