A professionally prepared business plan can launch an MFI into a high growth trajectory. M2i can prepare comprehensive business plans for MFIs with a medium to long-term perspective. It can also help these MFIs monitor their performance vis-à-vis the plans. The following are the key components of a good business plan.
- Mission and vision: An MFI needs to articulate what is the reason for its existence and what does it want to become in the long-term. M2i helps MFIs in defining their mission and vision keeping a long-term perspective in mind
- Governance structure:Governance structure of an MFI consists of the board of directors, which acts as the interface between the MFI and its external environment, and at the same time provide strategic support to overall operations. A good governance structure promotes transparent operations and helps in achieving long-term goals of the MFI.
- Organizational structure:The organizational structure consists of the legal constitution, divisions and departments as well as the system of authority and responsibility in the MFI. It defines the level of control, decision-making and growth potential of an MFI.
- Market: MFIs need to clearly understand their market to be successful in the long term. This understanding should entail various segments including geographical areas, income groups or occupation groups. Such an understanding of the market is critical to address concerns such as competition, growth, product development and risk management.
- Human resource policy: The human resource policy of an organization consists of the recruitment, training and development of the people required at different levels. Since Human resources are the most important asset of an MFI, carefully designed human resource policy can go a long way in ensuring orderly growth and professional management.
- Accounting system and MIS: The accounting systems and MIS consists of the series of books of accounts and records to be kept at the MFI as also the reports generated at different levels and the flow of information from one level to the next. The MIS and accounting systems are important from the point of view of effective management, compliance with the regulatory standards, fulfilling the requirements of different stakeholders – lenders, donors as well as the investors and most importantly the internal decision making in the MFI.
- Outreach projections: The MFIs need to project how much clients they would reach, what would be the average loan size and what would be the staff size. This would determine how much of loans they would disburse and how much of funding they would require.
- Projected financial statements:The outreach projections along with estimates of investments made and costs incurred to achieve the projected outreach provide the basis for projecting financial statements. One of the most important functions of these projections is that they help in determining the break-even level of operations.