Information for strategic planning

The Operations level consists of the board and senior management of the organization and the External Funding agencies. This has been illustrated in the image below.

Hierarchy

• Strategic information is used primarily by the institution’s board and senior management. Strategic information also supports decision making on the acquisition and allocation of resources, such as planning and budgeting for growth, opening and closing branch offices, and developing new financial products.
• Strategic information is predictive, dealing with the future and the relative unknown. It encompasses such issues as projected economic growth, inflation rates, competition, and changes in government policies.
• Strategic information is oriented toward the long term. And because it affects the directions that the institution takes, the future existence of the institution depends on its quality.
• Senior managers, responsible for a tremendous amount of activity, can easily be overwhelmed by information unless it is carefully selected and synthesized.
• The reports are focussed on aggregate information and general trends, delegating responsibility for details to the institution’s middle managers. .
• The reports are split among senior managers, so that the chief accountant focuses on financial statements, the credit department head on portfolio reports, and the savings department head on savings reports.
• The executive director needs an understanding of the key issues in each area but can rely on the senior management team for analysis and recommendations.
• Directors will regularly receive a concise, one to two page report providing the most essential information about the institution. Annexes can provide more detail for those interested.
• Directors will also receive a SUMMARY ACTUAL-TO-BUDGET INCOME STATEMENT, a SUMMARY BALANCE SHEET, and a quarterly CASH FLOW REVIEW
• Of all the user groups, donors and shareholders are most interested in institution wide information, and their need for information is the least frequent—typically quarterly.
• The reports will indicate whether the institution is on track and alerted to any problems if any. Many donors require specialized reports with specifically defined information.
• Microfinance institutions regulated by an external body will be provided reports for these regulators, which specify precise formats and definitions for report preparation.
• Information is also required by external users, such as clients (or members), donors, investors, regulators, other microfinance institutions, government agencies, and the media.
• Some external users will utilize information generated for one of the other three levels—for example, borrowers will require repayment schedules also used by operational staff.
• Others will require information from several levels—for example, a donor may want to know local inflation rates, the institution’s cost recovery, and several human interest stories about clients.
• Examples of Reports for senior managers in the head office
• Examples of Reports for the board
• Examples of Reports for donors and shareholders