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Projects > Uganda_Aug07

Original intention of this project was to measure the costs per loan for each loan product type and in each branch taking an activity based approach.

Obtaining and then regularly updating precise information on each loan officer’s time spent and km travelled in order to break down the associated costs to the respective loans is usually very cumbersome. However at Hofokam all loan officers (LO) maintained on a manual basis so called “monthly work plans” or client visiting schedules serving amongst others as basis for facilitation requests for fuel for the anticipated client visits during the upcoming month.

The idea arose to transform the original manual work plans into electronic ones and to enhance them with

further information by classifying all ongoing activities so that the whole day could be described in terms of these tasks. This had the following advantages:

  • Operations on the ground become transparent
  • LOs develop more consciousness regarding the efficiency of their operations
  • LO's supervisors can monitor and advise their LOs more accurately and use the summarized reports to analyse activities over time
  • Establishing the work plan for the next month is less of a burden since only an electronic copy of the previous plan needs to be saved and then adjusted
  • Everybody gets trained on the job in computer skills which employees had anyway asked for

Fifth week of a loan officer's work plan listing his regular visits for monitoring village bank groups, un-regular spot checking of some individual clients, the presentation of new clients (4) in the credit committee meeting, etc. The last lines summarize in particular the LO’s total number of existing and anticipated additional clients having their first disbursement in the next month (19) as well as the number of renewed loans.


Some loan officers together with their supervisors study the new work plans and practice their computer skills. The board of directors had immediately agreed to make an investment of one PC for every five loan officers starting with the main branch.

Asking loan officers and their supervisors to report their activities on a regular basis in an electronic format the foundation for improving the strategic planning model developed earlier for the institution as well as to build a performance model for loan officers was set:

Incorporating the work plans into the strategic planning model, more precise estimates of time spent by loan officers per product type per branch could be derived. On the other hand the parameters driving all costs and income items in this planning model could in turn be used to calculate each LO’s individual net margins, i.e. income minus costs, with respect to their outstanding portfolios in each loan product served. In order to achieve the latter task those costs that aren't directly related to the activities of the loan officers and their supervisors are also broken down to a single loan in an automated fashion.

The resulting performance model displays for each loan officer all key influencing parameters per product type such as the average outstanding loan amount per loan and total together with the respective associated margins, monthly loan loss rates, etc. This allows supervisors to analyse conveniently in which way the performance could be improved and to advise their respective loan officers accordingly.