Product policy: Refinance has been serving its borrowers with business loans. However taking high demand for consumer loans into consideration, it is started in November 2011. Both products are of desirable demand with reasonably viable supply in existing competitive market. Refinance shall offer these products in the existing and new markets to contribute to both social mission and organizational development. Besides, it is planned to launch a new product, SME loans in 2012 to keep in harmony with both sectoral growth and rapid organizational development with acceptable risk mitigation versus product diversification and other necessary measures.
Despite Refinance’s recent start-up, there is sufficient demand for Refinance’s business loan both in Baku and other regions of Azerbaijan. This can be explained the product characteristics being close to members expectation. Despite small portfolio, all Refinance members are paying timely without any delay. It is planned to do sufficient explanatory work among members to keep such good level by promoting on time clients apart from introduced penalties for late ones.
There is no doubt on Refinance’s potential retention rate to be high enough at desired level in the future. Before starting its operation, Refinance staff & board have successfully developed and adopted its Operational Manual for lending activity. This manual already includes necessary lending policies and procedures. Furthermore, in order to maintain reasonable balance between financial & social objectives of the company, it is planned to do a good supervision over company’s key indicators including outreach, productivity, profitability, etc. through plans and regular reporting according to CGAP standards.
Board & Management: As Refinance Board Members have sufficient knowledge on lending activity, they contribute their best to the rapid development of the company. Refinance’s board provides sufficient support towards company’s vision and policy issues. Besides, Refinance’s board is quite capable to monitor the institution performance versus its prudential and operational indicators. Refinance board chairperson provides expertise in banking & accounting. Refinance’s CEO, is the person with sufficient educational and professional background to conduct the company’s daily management up to the requirements from local legislation and international standards. Both board and management are combining efforts in attracting resources from both domestic & external sources to speed up development of the company. CEO has sufficient knowledge in strategic perspectives, management skills, and quite aware of issues regarding to attract resources.
HR management: Refinance has its organizational chart and all positions has appropriate job descriptions. Staff are recruited and trained to ensure professional skills. Staff turnover of Refinance is satisfactory. It is planned to introduce staff intensive system to do a due contribution towards portfolio quality as well as staff productivity. Refinance is drafting a need based training plan to do an appropriate human resource investment into the company operations.
Administration: Refinance uses locally developed MIS. MIS reports are CGAP complaints and designed for users of different organizational level. Portfolio reports provide both detailed and summary reports interpreted both in domestic and external currency. Refinance is developing it’s Internal Control System, however currently some components of this systems are performed by the Chief Accountant. Refinance is planning to perform acceptable external audit to meet the international lenders’ expectation.
Financing: Currently Refinance suffers lack of funding for its planned operation. Though ongoing negotiation with various sources, there is some delay in funding the operation of the company. Refinance will successfully manage its debt/equity, assets/liability, etc ratios through members contribution towards those figures, which will serve to rapid growth of the company provided desirable debt or equity investment is guaranteed.
Financial Management: Refinance produces reliable financial reports extracted from its MIS system to meet the needs of internal and external users. These reports provide sufficient knowledge on its financial position, performance indicators trend, etc. Refinance budgets and cash flow projection/statements are reviewed regularly. Company is planning to conduct variance analysis regularly. Refinance’s financial statements provide accurate information about its financial situation according to reported period or time.