W.A. Liqii Fi Qusannaa Oromiyaa: Oromia Credit and Saving (S.C.)
W.A. Liqii Fi Qusannaa Oromiyaa: Oromia Credit and Saving (S.C.)
W.A. Liqii Fi Qusannaa Oromiyaa: Oromia Credit and Saving (S.C.)
June 2020
Finfinnee, OCSSCO
1
Contents
Background.................................................................................................................................................4
1. Introduction.........................................................................................................................................4
2. Objectives...........................................................................................................................................5
3. Brief Country, Regional and Company Profiles..............................................................................6
2.1. Country Profile..............................................................................................................................6
2.2. Regional Profile...............................................................................................................................6
2.3. Company profile............................................................................................................................8
CHAPTER I: Fundamental Issues..........................................................................................................9
1.1. Mandate Analysis..........................................................................................................................9
1.2. Mission, Vision and Values.........................................................................................................11
CHAPTER II: Stakeholders, Collaborators Analysis.........................................................................12
2.1. Stakeholders Analysis............................................................................................................12
2.1.1. Internal Stakeholders.........................................................................................................12
2.1.2. External Stakeholders........................................................................................................14
2.2. Collaborators Analysis............................................................................................................16
CHAPTER III: Situation Analysis..........................................................................................................17
3.1. Internal Situations..................................................................................................................17
3.1.1. Organizational Structure& Governance.....................................................................................17
3.1.2. Workforce of the company........................................................................................................20
3.1.3. Physical Resources Assessments.............................................................................................21
3.1.4. Products / Services.........................................................................................................................22
3.1.5. Brief Financial Performance Review.........................................................................................27
3.1.5.1 sustainability/profitability..............................................................................................................27
3.2. External Situations......................................................................................................................29
3.2.5. Political Situations...................................................................................................................30
3.2.6. Economic Situation..................................................................................................................31
3.2.7. Socio-cultural Situations.........................................................................................................33
3.2.8. Technological Situations..........................................................................................................36
3.2.9. Legal situations........................................................................................................................37
3.3. Market Analysis & Planning.......................................................................................................37
3.3.5. Microfinance Credit Service seeker projection.....................................................................37
3.3.6. Competitors analysis................................................................................................................40
3.4. SWOT Matrix................................................................................................................................42
2
CHAPTER IV: Key Strategic Problems, Goals & Objectives...........................................................43
4.1. Key strategic Problems.....................................................................................................................43
4.2. Fundamental Strategic Goals..........................................................................................................43
4.3. Strategic Objectives..........................................................................................................................44
CHAPTER V: Strategic Enablers and Potential Risks........................................................................56
5.1. Strategic enablers.............................................................................................................................56
5.2. Potential Risks and Risk Management Strategies..........................................................................58
5.2.1. Types of Microfinance risks..........................................................................................................58
Chapter VI: Monitoring & evaluation System.....................................................................................61
6.1. Roles & responsibilities of company Organs..................................................................................62
6.1.1. Monitoring.....................................................................................................................................62
6.1.2. Evaluation......................................................................................................................................63
3
Background
1. Introduction
Oromia Credit and saving Share Company (OCSSCO) was legally established as microfinance
institution on August 4, 1997 by satisfying the requirements of the National Bank of Ethiopia
following the endorsement of Proclamation No 40/1996, the proclamation that stipulates the
Licensing and Supervision of Micro Financing Institutions in Ethiopia. Before, licensing to MFI,
it has provided credit service in Rural Oromia by the name Oromia Rural Credit Development
Scheme Project from 1996 to August 4,1997 under Oromia self-help Organization (OSHO).
This indicates that the company has been in operation for the last 26 years.
OCSSCO begun microfinance operation by opening four branches in Oromia National Regional
State namely, Hexosa in Arsi zone, Shashemene in West Arsi Zone, Sinana In Bale Zone and
Kuyu in North Showa zone. Currently the company has 19 zone offices and 396 branches
across Oromia Regional sate which geographically gave coverage to 99% of the districts in the
region and around 85 % of the Areda ( local administration) in the region in 2020. The number
of clients annually get services of microfinance has been increasing from year-to-year
corresponding to the growth of the company. Simultaneously, the loan disbursement, and the
mobilized deposit shows significant growth, but not adequate, in the past operational years. For
instance, in 2019/2020 fiscal year the company provided financial services to over one million
active clients, disbursed birr over 8 billion to farmers, MSMEs operators , women entrepreneurs
and other section of the society. In the same year, around birr 7 billion deposit was mobilized
through its channels to cover the credit demand of the people in rural and urban. The company
also diversified its credit and saving products through time to ensure the financial accessibilities
of society particularly low-income people. The manpower, which is the backbone of the financial
institution, tremendously increased from less than 100 at the beginning of operation to current
figure of 600 permanent staffs.
As history of the company shows, this is the 4 th five year strategic business plan that the
company has formulated since its establishment. The first five year long term strategic business
plan was formulated in 2004/5 to 2009/10. The second strategic business period was 2010/11 to
2015/16 and this the time when OCSSCO shows fundamental growth in comparison to the
previous periods. The third strategic business plan year has been extended from 2015/16 to
2019/20 and ended in June 30/2020. The period was characterized by mass protest, violence,
4
displacement, instability and insecurity particularly in Oromia regional state which has adversely
affect the implementation of the goals and objectives. this document, which is the 4 th strategic
plan which extends from 2020/21 up to 2025/26 take into account such social unrest and protest
and the mitigation strategy in case of the occurrence of the same incidents and recommended to
take revision when the problem is beyond control.
This business strategy is organized in 6chapters that discuss and analyze specific issues that build
up the whole document. The first chapter deals with fundamental issues such as mandate
analysis, vision, mission and values and adopted for this strategic plan. The second chapter gave
emphasis to internal and external situations analysis to construct and design the strategic
document. In internal situation analysis, internal capacity of the company such as organizational
structure, resources such as manpower, material and financial capacity, products and services
etc., were deeply assessed to understand where the company is and to forecast the ultimate goals
in the coming five years. Economic, political, social and technological external factors including
market assessment, which are uncontrollable environment, was realized for their positive as well
as negative impacts. Finally, strengths, weakness, opportunity and threat were organized in the
summery of SWOT matrix. In chapter four, strategic issues, goals and objectives was identified
specific 6 specific goals were set to move the company forward in the period. Chapter six and
seven discuss strategic assumptions and monitoring and evaluation system. Finally the document
incorporates annexes of Microfin financial projections and key performance indicators to
measure the output.
2. Objectives
This strategic business plan has numerous objective that aims at ensuring the growth of the
company and maintaining financial as well as operational sustainability. The major
objectives are to;
5
3. Brief Country, Regional and Company Profiles
2.1. Country Profile
The Federal Democratic Republic of Ethiopia, is a landlocked country in the Horn of Africa. It
shares borders with Eritrea to the north, Djibouti to the northeast, Somalia to the east, Kenya to the
south, South Sudan to the west and Sudan to the northwest. With over 109 million inhabitants as
of 2019,(World bank) Ethiopia is the most populous landlocked country in the world and the
second-most populous nation on the African continent. The country has a total area of 1,100,000
km2 (420,000 sq mi). Its capital and largest city is Addis Ababa, which is part of Oromia national
regional state.
Diverse nations, nationalities, peoples, and linguistic groups are the main characteristics of the
country.(MOI, 2004).Currently, Ethiopia is administratively structured into nine national
regional states—Oromia, Tigray, Affar, Amhara, Somali, Benishangul-Gumuz, Southern Nations
Nationalities and Peoples (SNNP), Gambela, and Harari—and two city administrations, Addis
Ababa and Dire Dawa.
Ethnically, the population of Ethiopia is heterogeneous. The principal ethnic groups is Oromo
followed by Amhara, Sumalee, Sidama and Tigre etc. Christianity, Islam and protestant are the
dominant religions with significant number of traditional religion. Increased throughout the
1990s. In 1992, manufacturing constituted 3.9 percent of the GDP, whereas its percentage share
had slightly increased to 4.3 percent by 1998.
6
Oromia is characterized by diverse relief and demographic features. It has three climatic zones,
highland, semi-highland and lowland that varies from 500m-4377m above sea level. /Oromia
bulletin/ with majority of highlands and semi-highlands. The average maximum annual rainfall is
approximately 2400mm in parts of Bale, Ilubabor Central and Western Highlands and the
minimum is 400mm in parts of Borena in Southern Oromia. The average temperature for the
region is ranges from less than 7.5oC highlands and greater than 27.5oC in some parts of the low
lands. The highland areas are characterized by sedentary rain-fed agriculture and livestock
production, while the lowlands are largely inhabited by pastoralist communities who depend on
livestock production. Oromia has experienced high and sustainable economic growth, which is
mostly attributable to growth in the agricultural sector.
The population of Oromia region was estimated to be 36,830,815 by 2010 EC (KWO,2010) In
2020 it is projected to nearly 39 million, with 50% male % 49% female. According to KWO,
out of the total population, 85 % lives in rural and 15 % live in urban. About 47.6% of the
population is under 15 years, 49.2% of the population age range between 15-64 year of age and
3.2% above 65. Other ethnic groups Amhara, Somali, Gurage, Sidama, and Tigray lives in the
region.
a) Economic Activities
Oromia’s economy, like the country’s economy, is dominated by agriculture and followed by
service and industry sector. Agriculture, which includes crop production, livestock raising and
fishing, is the back bone of the regional economy. The sector provides foodstuffs, and industrial
materials and export products like coffee, and cereal crops. Chat is also the other cash plant that
mainly growing in the region. The contribution of the sector to national as well as regional GDP
is remained high. 1n 2016/17 the contribution of agriculture to national GDP was 36.3%,
industry 23.7% ( Manufacturing 6.4% 7 construction 18.2%) service sector 39.3%.( GTP-II
midterm review report). As reported on Kitaba Waggaa Oromiyaa 2009 EC the sectorial
contribution to regional GDP were, agriculture51.0%, Industry15.2% and Service 33.8%. This
indicates that agriculture dominate the economy of the region and followed by service and
industry. Within industry manufacturing contributed 8.1 % which is still emerging. In the Home
Grown Economic Policy, the government gives due emphasis to the proportional growth of all
sectors with special emphasis to industry. The role of microfinance in sectorial growth is significant
in financing SME operators and farmers.
7
b) Infrastructure
Due to its geographical location many parts of Oromia regional state has better infrastructure like
road, railway, telephone, internet and electricity. With regarding road coverage the region has
49329.93 km rural roads which implies that the linkage between gandas and anas have shown
encouraging increment especially in URRAP implementation. Ibd. No data was found about the
user of mobile and wire telephone, internet, and electricity. However, as stated above, Oromia is
one of the regions with better coverage of this services.
c) Education
Since it is a populous region, the number of students, teachers and education facilities in the region are
large in numbers. The region had 48,89 1st level primary schools ( grade1-4), with total number of
enrollment of 3,731,230. The numbers of 2 nd level primary schools (grade 5-8) were 5, 853 and the
number of enrolled students were 1,781,335. The region had 447 secondary schools (grade 9-10) that had
546,961 students. Preparatory schools (11-12) in the region reached 163 in number with71, 035 students.
According to BOFED report /2011/ “The health status of Oromia Region is generally poor as it is true for
the country as a whole compared to other low income countries.
OCSSCO, as a microfinance institution, was established in the form of Share Company defined under
article 304 of the Commercial Code of Ethiopia (CCE). The Code defines a share company as “a
company whose capital is fixed in advance and divided into share and whose liabilities are met only by
the assets of the company.” The NBE registered and licensed OCSSCO upon fulfilling the requirements
set by the MFIs Proclamation No. 40/1996. Accordingly, OCSSCO has gotten its legal status and begun
its formal operational activities on August 4, 1997. Proclamation No. 40/1996 was repealed and replaced
by the new Micro Financing Business regulation, Proclamation No 626/2009 in 2009, and then after the
new law has been governing the industry. Amendment was made on the existing proclamation 626/2009
which referred as Micro-finance Business (Amendment) Proclamation No. 1164/2020 and this
proclamation came into force commencing from January 2020.
8
OCSSCO was established as a Share Company by five shareholders and owned by these shareholders.
However, the number of shareholders were grown to 11 namely: Oromia National Regional State, Oromo
Self-Help Organization (OSHO), Oromia Forestry Development Enterprise, One Natural person, Oromia
Development Association (ODA), Shashemane, Burayou, Jimma, Nekemte, Sebeta, and Bishoftu Towns
Administrations. Up on establishment, OCSSCO has an authorized capital of Birr 60.00 million out of
which Birr 20.00 million has been subscribed by the founding shareholders. Currently the amount of
capital is raised to 11 shareholders and the paid up capital of 120 million. Out of the total shareholders
amount Oromia National Regional State has the highest share of 25%. Burayou contributes 17.9%,
Shashemene 16.7%, Jimma and Nekemte 13.9% each. The remaining shareholders contribute below 5%
each.
OCSSCO, as developmental tool, has been becoming an increasingly important role player in the
development activity of the region. The Company’s operation has spread across 21 zones and 385
branches in the regional government, other regions city administrations. The Company has been
providing credit, saving, micro insurance, local money transfer and mobile and agent banking in the
Oromia National regional state, Harari regional state and Finfina & Dire Dawa City Administration.
a) Accepting both voluntary and compulsory savings as well as demand and time deposits;
b) Extending credit to rural and urban farmers and people engaged in other similar activities as
well as micro and small-scale rural and urban entrepreneurs;
9
e) Purchasing income-generating financial instruments such as treasury bills and other short
term instruments as appropriate;
f) Acquiring, maintaining and transferring any movable and immovable property including
premises for carrying out its business;
g) Supporting income generating projects of urban and rural micro and small scale operators or
others engaged in productive activities;
i) Managing funds for micro and small scale businesses or others engaged in productive
activities;
j) Providing financial leasing service to lessees in accordance with Capital Goods Leasing
Business Proclamation.
As microfinance institution, the mandate has granted OCSSCO to involve in wide financial
services. From the stated mandates OCSSCO did not apply payable through drafts which has
customer demand and a major area of completion with banks. The micro insurance is limited
only for GB loans and does not include other insurances like weather index insurance, livestock
and cattle insurance. The micro insurance service is also not detached from the company and
function independently. There is also limitation in acquiring, maintaining and transferring any
movable and immovable property including premises for carrying out its business particularly
the movable one. Mandates stated under ‘j’ and ‘l’ are not fully implemented. Therefore, it is
valid to address the gap in the mandate and swell the businesses of the company. Since the
financial industry has been intensifying the implementing digital services, which OCSSCO has
severe limitation, this strategic business plan should give special emphasis to the less emphasized
10
service to cope up with the industries as well as the world. Amplifying the service is also part of
achieving the vision of the company. Furthermore interest free microfinance service, which was
neglected in the previous strategic business plan should be the main concern of this strategic
business plan as the major operational region of OCSSCO is equally dominated by Muslim
inhabitants.
Mission Statement
A reexamination of an organization’s current mission was made in order to accept the existing
one or alter it with the new mission that fit with the Company’s mandate and objectives. The
current mission statement of OCSSCO is:
The existing mission statement is very clear and states the Company’s objectives,
operational area and activities. Besides, it is short and easily memorable and expressed to
others. However, it lacks how the company is going to bring customer satisfaction and win
the competition, which is through the use of modern financial technologies. Hence, it is
advisable to accept and use the existing mission statement for this strategic plan year.
Vision Statement
OCSSCO’s vision stated on the 3rd Strategic Business Plan which had been in use for the past
five years stated as “Aspire to be a world class MFI contributing to economically empowered
and transformed society by 2025”. This vision has limitations such as over ambition expressed
by “world class” and the year set to become ‘world class’ , which seems unrealistic. To make it
short and realistic it is modified to “Aspires to be a bench mark financial institution”
Core Values
Organizational core values guide organization’s thinking and behaviors. It can be thought in
terms of dimensions like pro-social activities, market, performance, people, corporate culture and
achievement. The existing core values of OCSSCO is easily memorable but it is has redundant
11
concepts and difficult to state each letter in the acronym. Considering this it is reshaped to the
following core values.
Stakeholders of the Company are organizations groups and individuals who are in a position to influence
Company’s operation or place their interests/demands on the Company’s normal operational activities or
those who can affect the normal operational activities of the Company directly or indirectly.
Stakeholders’ analysis helps the Company to clarify their demand, expectations and influences and work
toward fulfilling their expectations.
12
Stakeholde Expectation/s Likely Reaction and Degree of Institutional Response
rs Impact if Expectation is Importance
not met
13
Stakeholde Expectation/s Likely Reaction and Degree of Institutional Response
rs Impact if Expectation is Importance
not met
15
Stakeholders Expectation(s) Likely Reaction and Degree of Institutional Response
Impact, if Expectation is Importanc
not met e
16
NGOs Capacity building; Capacity building;
Restricted intervention Outreach expansion;
fund management; Attain social mission;
The governing organs of the company of the company consists of General assembly, Board of Directors
and top Management.
a) General Assembly
General Assembly is the supreme organ of the company that have the power of decided upon everything
relevant to the company in general that includes driving policies, appoint and dismiss Board of Directors,
amend memorandum and article of association, examine and approve annual budgets, activity and
performance reports. (Initial Memorandum of Association Article 8) OCSSCO has 11 shareholders who
assume the power of general assembly and out of which 10 are organizations and one is natural person.
One of the problem in OCSSCO general assembly is the replication of General assembly and Board of
directors that minimize the check & balance of the two structures. In most cases all the Seven Board of
Directors with higher votes and even with higher political authority are member of the general assembly
and influences the decisions of the supreme organs. Rising the number of shareholders help the company
to inject additional capital and also solve the limitation of check and balance in the general assembly
meeting.
b) Board of Directors
Historically OCSSCO’s Board of directors members are senior government authorities with enormous
17
duties and responsibilities. The current Board members are people in ministerial level, regional cabinets,
and mayors of city’s administrations. Powers and duties of the BODs are clearly stated on the
memorandum of association article 10. In addition, literatures show the BODs have the fiduciary,
strategic, supervisory and management development role to maintain the qualitative as well as the
quantitative growth of the company. Although their role in this regard are undeniable, it has not been
satisfactory due to many tangible reasons and this also adversely affect the operation of the company.
The limitation observed from the BODs side are
Not conducting regular meeting as per the regulatory and general assembly schedule.
In ability to find them for decisions under their authority limit and for decisions that needs
their directions
Many of them lacks live experiences in financial business management particularly
microfinance industry
Difficulty to change the chairperson of the BODs as only one natural person in the
shareholder, and organization shall not authorized to the chairperson of BODs according to
commercial code of the country.
In ability to allocate adequate time for BODs meeting to look into issues in-depth.
Lacks of different board committees that support the BODs
Considering the challenges of microfinance business operation and the demand for instant decisions it is
recommended to establish strong BODs that have sufficient time, experience and knowledge in the
financial industry. In addition, rising the number of natural person shareholder is very important to obtain
alternative Board chairperson that replace the only one natural person whose term of assignment is
limited to only three years according to regulatory body. In addition establishing board committees is
mandatory as regulatory requirement and also useful to minimize the burden of the Bods.
c) Executive Management
Executive management is the highest level of management in an organization and responsible for
planning, leading and controlling, supervising a company’s business. In OCSSCO, the top
management classified into two categories: executive management and top management.
Executive management consists of EMD and three Deputy EMD with high level responsibility.
The management is consists of the executive committee, and 14 Directorates and one service
managers totally 19 members. From the total 19 number of management members six have
experience of greater than 10 years in OCSSCO top management and 4 have between 5-10 years,
three of them have 2-5 years and 6 of them recently joined the management after the
implementation of 2020 structural study and have experience of less than one year as
18
management member but have accumulated experiences in different position form 10-22 year.
Qualification wise many of them have acquired post graduate level except few of them. Hence
the composition of OCSSCO top management in terms of education qualification and work
experience depicts that they are capable to discharge duties and responsibilities assigned to them
as corporate management. The combination also assures the existence of succession plan in the
management foreseeing the future. However, the management has not been gender sensitive and male
only management and this also need rectification effort.
Although the combination is good enough and promising to run the company, there are limitations that
have been observed and needs rectification measurements. These includes;
Many of the gaps arise from absence of t high level managerial capacity building training, capacity
building, experience sharing and exposure visit etc. It is also recommended to clearly demarcate the
authorities between the two organs to ensure transparency, accountability and responsibility. The size of
the members of management is also demand revision and segregation. The gender issue is also needs
attentions.
19
qualification, only 10 staffs or 0.22% have post graduate qualification and 753 or 16.5%were
first degree graduate. Around 55 % of the staffs at this time has possessed diploma or level IV
qualifications. On June 30/2019, the fourth year of the 3 rd strategic business plan, the total work
force of the company at all level reached 5869 excluding 301 outsourced security guards. This
number is higher than the 2015 OCSSCO manpower by 1,286 staff or by 28.06 % with annual
average increment of about 7%. From the total staffs 86.31 % have been working at branch level.
The data indicates that the proportion of the branch staffs shows diminishing trends while zone
office slightly show increment. The proportion of male to female is almost the same with
previous period. The number of customer relations officer was 1,250 while the number of
customer service officer and branch accountant was 1, 675, which is higher than CROs by 425.
The CROs proportion to total branch staff was 23.67 %. CROs are the motors of OCSSCO in
running the operation of the company and generation revenues.
Qualification wise there have been change when compared to the previous period. However, yet
22% of the employees below diploma/Level IV qualification and this should be the point of
attention of the management. Table below summarize the qualification of the general employees.
Qualification Male Female Total percentage
MA/MSC 37 3 4
0 1
BA/BSC 1,483 527 2,01
0 34
Level IV/Dip 1,858 689 2,54
7
43
Less Than Level 917 355 1,27
Iv/Dip 2 22
Grand Total 4,295 1,574 5,86
9 100
In general OCSSCO has strong work forces in terms of age combination, qualification diversity
and gender mix and highly contributed to company growth & success if properly managed and
utilized. However, the following issue needs attention
Timely Response to company’s employee salary and benefit demand ahead of the
demand arises and shake the company
The proportion of customer relations officer should be need attention as they are the
engine of the company.
Ensuring good governance, fairness in administration, promotion, transfer and other
benefits
20
Consistent and continuous capacity building training
Sharing company mission and vision, orienting their rights and obligations to act
accordingly
With regarding zone, in fact, old and cost centered vehicles have been supplied in the
past five years. Some of them have become the source of revenue for garages. In these
vehicles it will be more difficult to run the operation of the company in many zones as
immediate and frequent support for branch becomes mandatory. Similar to zonal
offices, some of the vehicles at head office have served for more than 10 year and seldom
functioning. The plan to purchase three vehicle per year (totally 15) was partially done
21
by purchasing five pick-up cars and three automobiles. By and large, OCSSCO should
give emphasis for the supply of motorbike, and vehicles to support its growing operation.
Concerning motorbike, in addition to its scarcity, the way it has been handled has visible
problems. Using the motors for training, not controlling and replace its lubricants and
motor oil, negligence in driving are some of the problems. Creating awareness and
establishing controlling system like GPS installation is very important
Group Based Loan: GB loan, Urban and rural) is the oldest and main component of OCSSCO loan
which constitutes significant portion of the loan portfolio of the company. The loan targets mainly rural
farmers to increase their productivity through provision of agriculture based loan. To serve petty traders
and in urban area, the company also render urban group based loan but not significantly increasing.
22
1 9
201 5,567,163,62 0.05 295,863,5 0.06 934,7 5,863,027,1
8/19 874,67 2 60,07 40 49 62
5 4
878,16 5,537,688,851.4 0.08 317,404,272.7 0.09 62,605
2019/2 3 5 2
0
As shown above, the group base loan portfolio particularly the rural group based one has shown
tremendous growth by double fold as compared to base year, but clients who has gotten the service has
not been significantly changed. This indicates, the growth in loan size rather than no of clients and at the
same time the demand for this product is high. However; this product has been suffering from low
average loan size and group formation problem. As indicated on different supervision report the farmers
have been complaining for better average loan size as inflation annually increased and prices of goods
and services has been continuously escalating. The group formation and linked group co-guarantee and
joint liability has not been easing the borrowers and even the company because it challenges repayment in
some aspects. Demanding for individual loan is quest at hand. Therefore it is better to address these issues
in this strategic business plan so as to sustain the business in assertive condition. In addition, distant from
the service provision centre that expose farmers to high transaction cost, poor client screening by CROs,
insufficient training & follow up and inadequate client handling are the other problems associated with
this product.
Enterprise Loans: Micro and small enterprise loan, (MSE) women entrepreneurs Development Loan
(WEDP) and business loan are categorized under this component. Of the three products MSE loan, which
has been rendered to un-employed youths, aiming to encourage self-employment has been a challenging
one as indicated below.
23
2018/1 2 0.13 207,02 0.01 146,219,42 0.01
9 45,330 ,994,553,843 1,11 8,137 1,348 8.76
5
2019/20** 3 0.09 199,89 0.01 1,7 232,715,51 0.01
47,799 ,349,062,428 1,12 1,686 28.00 9.86
6
*May be by individual member **only Six month performance
From the above table one can understand that the number of borrowers and the amount of
outstanding loan portfolio has been increasing from year to year except in few situations. The
recovery rate of the loan has been in challenge with special reference to MSE. The Par of MSE
product is very high including in 2016/17. In this year it seem very low however the reality
shows that the PAR was hidden due to large disbursement of youth fund. The Portfolio at risk for
WEDP and Business loan is within the range of industry average and this could be attributed for
the loan is secured by collateral and it is demand driven loans. As observed from field
supervision and OCSSCO annual report the repayment challenge with regard to MSE is very
tough and difficult to maintain the regulatory requirement. This is because of supply driven
nature of the loan that the government direction to render the service for unemployed youths. In
addition, this loan is easily exposed to favoritism, nepotism, misdeeds, staffs negative attitude
toward the product, and political interest, not supported by strong collateral and guarantee like
WEDP & business loan. Problem of Enterprise group formation, member’s variation in interest
to run the business as per their plan, sharing of borrowed money for personal consumption,
disappearance of MSE after accessing the loan, business failures have been the sources of the
miscarriage for this loan. If strategically and independently managed, making it demand driven,
minimized political interference, the product is the main solution for the current unemployment
problem.
b) Savings products
OCSSCO, as the vanguard financial institution that introduces modern saving to rural community, its
share of the saving market very limited in terms of accounts and cashes. What is undeniable is that the
volume of saving has shown essential growth in the past two decades but has mismatch with the potential
of the region of Oromia.
Year
Total Saver Saving Mobilization Total Net saving
Com Vol
24
2014/15 1,175, 425,015, 1,712,987, 2,138,003,1 2,256,911,6
588 847 282 28 64
2015/16 1,168, 427,024, 1,968,680, 2,395,705,7 2,340,065,1
016 938 851 89 53
2016/17 2,496, 1,088,598,0 3,741,579, 4,830,177,9 3,750,012,9
230 08 911 19 80
The table depicts that the amount of annually mobilized saving has grown incrementally with slow rate.
For instance the number of saving accounts couldn’t able to pass one million in the last five years. The
net saving only grow nearly by 100% in five years. The amount of saving annually collected has not been
satisfactory for a big mass base company like OCSSCO.
In fact the company has diversified its saving products like commercial banks and paying reasonable
interest to savers. In some contractual saving products like Handhura, Sorema and Sebeta Ayo, OCSSCO
pays rather attractive interest rate than even the commercial banks. However, the amount of cash
collected from these products have not been significant. The reasons for low saving mobilizations are
1. Low emphasis paid to saving mobilization from the inception period of the institution
2. The community including its clients know OCSSCO better in loan provision rather than
saving mobilization
3. Less introduction of saving products to the market
4. Not marketing some saving products( handhura, Sorma, sebeta Ayo) as required
5. Branch level staffs also give priority for loan and do not want to face challenges of saving
mobilization.
6. Poor service provision in account opening and withdrawal as well
7. Lack of effective and dependable saving mobilization strategy
Micro credit life insurance is one of the products of OCSSCO which have been in operation since
-----------. The purpose of micro credit is to minimize repayment risk in case of loan client’s deceased,
25
develop group self-guarantee confidence and support family of the clients. The product has been applied
for only group based loan clients. The rate of insurance premium are 1%, 1.5% and 2% of the gross loan
with different benefit packages for the insurer. In most cases clients prefer 1% premium rather than other
options and this shows either the benefit packages are not attractive or no awareness creation tasks have
been deployed to clients for the remaining other options. The other problem related to this product is the
increasing number of reported deceased clients from year-to- year. In addition, OCSSCO couldn’t able to
expand the products to index base crop and live livestock insurances and other like fire, health etc
insurances.
According to the financial regulation of the country, MFIs are mandated to provide local money transfer
services. In this regard, OCSSCO has entered into agreement with Cash Africa RORAIMA and started
the service in 2009/10 and this service had stopped offering service few years back. Currently the
company has been providing money transfer service via M-birr platforms which has been demonstrating
significant growth. The local many transfer service has been declining not only in MFI but also in
commercial banks due to digitization of the financial services and core-banking system in which anybody
can deposit certain amount of money in the accounts of an individual in distant and automatic withdrawal
is possible instead of transferring via telegram or other means. Therefore, the local money transfer
service has little benefit to local customer as a result of other fast delivery system.
OCSSCO started provision of M-birr service in 2012 as pilot service at Sululta, Sebeta and Dandii
branches. Later it was decided to fully implement and it has been rolled out to all branches with slow
growth. The platform avail saving, withdrawal, buy goods and mobile cards in addition to sending money.
As the transaction number rise up the revenue generated from this service has been increasing as shown in
table below. In addition to generating revenue, the service has solved the problem related to PSNP
payment system in Oromia region and benefit the poor and the government as well. The service seems to
rely on this program and couldn’t expanded to the community at large.
26
Currently almost all branches of despite some progress the service has different problems that requires
attention. Some of the problems are
e) Service Provision
OCSSCO has over couple of decade experiences in microfinance service provision. In these years of
services it has brought economic changes in rural as well as urban by creating financial access to mainly
the poor, unemployed youths and women. The service provision as studied by OCSSCO has limitations
that require immediate action to implement this strategic business plan. In this regard, the major problems
are;
Lack of prompt service in loan processing and deposit withdrawal and no set standard service
time.
Time consuming service that exposes clients to additional transaction coast
Lack of respecting customers and treating as ‘king’
Problems of loyalty in provision of services
Unfair treatment of customers and reflection of favouritism, partiality, preference etc
3.1.5.1 sustainability/profitability
a) Return on Asset: Return on assets (ROA) is a profitability ratio that provides how
much profit a company is able to generate from its assets. It measures how efficient a
company's management is in generating earnings from their economic resources or assets
on their balance sheet. It also best used for comparing a company’s current performance
to its previous performance. Table below shows OCSSCO’s return on asset for the last
four years.
27
2015/16 5,165,615,453.00 4,944,403,077.50 306,812,596.00 6.21
2016/17 8,628,006,709.00 6,896,811,081.00 378,176,193.00 5.48
2017/18 12,184,985,130.00 10,406,495,919.50 505,326,869.00 4.86
13,634,811,224.0
2018/19 0 12,909,898,177.00 595,402,929.00 4.61
14,390,759,628.0 375,240,296.0
2019/20 0 14,012,785,426.00 0 2.68
According to this efficiency indicator, OCSSCO return on asset has been positive and the
amount of profit shows annual increment. However, the ROA ration is with continuous
diminishing trends from year to year in the last five-year. This indicates the declining of the
company’s earnings from its economic resources or assets.
Satisfaction of return on asset depends on what is normal for the industry or company
peers. However ROE is a key profitability ratio that investors use to measure the
amount of a company's income that is returned as shareholders' equity. As some
literature shows ROEs of 15–20% are generally considered good and therefore it had
been good for OCSSCO fort 2016 to 2019. In 2020 it shows unsatisfactory achievement.
What is generally observed from the above table is that the ROE of OCSSCO has been
28
fluctuating from year to year and did not show growth in the past five years. hence it is
one of the strategic issues that should be considered to maximize the profitability of the
company.
c) Operational self-sufficiency:
Operational Self Sufficiency (OSS), expressed in percentage terms, provides an indication as to
whether a Microfinance Institution (MFI) is earning sufficient revenue (through interest, fee and
commission income) so as to cover its total costs-financial costs, operational costs and loan loss
provisions. (https://www.researchgate.net/publication/ I t is when the operating income is
sufficient enough to cover operational costs like salaries, supplies, loan losses, and other
administrative costs. ( Anand Rai, Anil Kanwal, Meghna Sharma) the projection of OCSSCO in
this regard was 192.60% in the first year, 167.90%, 174.30%, 181.30% and 184.%in the 3 rd
strategic business plan. The performance is close to the projection with small differences
160.01% , 160.90%, 164.02% for three years. Greater 100% is acceptable ratio and as it is far
from this breakeven point ensures the company’s operational sustainability.
d) Financial self-sufficiency
Financial self-sustainability is when MFIs can also cover the costs of funds and other forms of
subsidies received when they are valued at market prices. Meyer (2002) indicated, "Measuring
financial sustainability requires that MFIs maintain good financial accounts and follow
recognized accounting practices that provide full transparency for income, expenses, loan
recovery, and potential losses." In the strategic business plan, 150.80%, 131.00%, 137.70%,
143.10% and 145.20%. OCSSCO is not financially self-sufficient because it is exempted from
government tax, over birr 4 billion fund injection at zero cost of fund, and experience of huge
concessional loans which need to adjust to its revenue.
29
3.2.5. Political Situations
Ethiopia is one of the diversified countries with different nations, nationalities and peoples with
varied but interrelated cultures, norms, values and interests too. After the fall of Derg regime in
1991, the Ethiopian politics scored many prudential progresses with regard to economy, social,
and political ever before. The spark light of democracy and the essence of equality, justice,
human right and private property has been shown. People relatively have better standard of
living ever before, live in peace and stability, and have better access to infrastructure,
educational institutions (college/universities) and
Political instability: Since 2014 the people, particularly the Qeerroo & and Qarree Movements
political groups and activists revolt against the ruling Ethiopian People’s Revolutionary
Democratic Front (EPRDF) government in quest for democracy, equality, good governance,
justice and human rights. Despite the revolt ended with inner party reform that later bring about
ideological change, the political instability have been existed yet in almost all regional state of
the country mainly in Oromia where OCSSCO has been operating for the last 22 years. Armed
struggle in significant zones, insurgent movements, hostility among political parties prevails here
and there since the last five years. The 4th implementation of the 4th strategic business plan of
OCSSCO had highly been affected by this instability. Fall in repayment, increase in PAR,
limited expansion, rise in irregularities & disorders, and lose creditworthiness have been among
the manifestation of the impact of political instability. This instability is not fully changed to
stability at current time and there is a fear it may be continued for some years here after.
Therefore, this strategic business plan should take into account how to manage this incident if it
will continue for certain period of time.
Election 2020 and its consequence: According the constitution of FDRE, the national election
shall take place at mid of August, 2020. However due to COVID-19 pandemic, the election
30
schedule is postponed to unknown time. Whatever the time, the political situation during election
becomes stiff and may be result in chaos and social disorder. In addition, the change of the ruling
party may be a challenge for OCSSCO because it is a government affiliated MFI that was
established by the current ruling party. If the election is concluded peacefully and power is
transferred in due process of law it is an opportunity to OCSSCO in maintain peace & stability.
By and large, the upcoming election is another political challenge and opportunity for OCSSCO
in one way or another.
The economy of Ethiopia is a mixed and transition economy with a large public sector. The
government of Ethiopia is in the process of privatizing many of the state-owned businesses and
moving toward a market economy. In the last three decades the country has been liberalized its
economy and as a result a numbers of government owned firms has been privatized and the
financial sector’s operation has been opened to Ethiopian citizens. As a result, 16 private
commercial banks, 41 MFIs and 17 insurance companies entered the financial market under the
supervision of the National bank of Ethiopia. Due to this economic policy measure the country
has been registering double digit economic (on average 10%) growth for over one decade despite
the fact that it is still one of the poorest countries in the world. As the World Bank Group
overview, Ethiopia's economy experienced strong, broad-based growth averaging 9.9% a year
from 2007/08 to 2017/18, compared to a regional average of 5.4%. But, Ethiopia’s real gross
domestic product (GDP) growth decelerated to 7.7% in 2017/18 due to reduced government
public expenditure aimed at tackling the growing current account deficit and indebtedness.
Political uncertainty and severe foreign exchange shortages also diminished growth.
Ethiopia's economy is based on agriculture, where coffee is a major export crop. As of 2015,
agriculture accounts for almost 40.5% of GDP, 81 percent of exports, and 85 percent of the labor
force. Many other economic activities depend on agriculture, including marketing, processing,
and export of agricultural products but the government is pushing to diversify into
manufacturing, textiles, and energy generation. Therefore, the economic basis is suitable for the
operation of microfinance institutions like OCSSCO who has been dominantly financing
farmers, SMEs organized agro industries, food processing and value chains.
31
Inflation: By definition, inflation is a quantitative measure of the rate at which the average price
level of a basket of selected goods and services in an economy increases over some period of
time. It indicates a decrease in the purchasing power of a nation's currency by decreases the
value of money and rising the commodity prices.
The inflation rate in Ethiopia varies from month to month and the average annual rate has been
6.63%, 10.69%, 13.83%14.6% /https://www.statista.com/ from 2016 to 2019 %respectively. This
is by far higher than the current deposit rate of the country which is 7%. The implication of
higher inflation rate above the deposit rate discourage savings that because the value of deposited
money is falling over time. It also affects the price of borrowing to cover financial as well as
operating costs. In its strategic business plan OCSSCO should take into account the effect of this
macro-economic conditions that will result in increasing loan size and at the same time the
sources of fund to cover the demand.
Interest Rate: Interest rate can be seen from two perspectives. The first one is deposit rate on
saving and the second one is lending rate.
a) Deposit rate: It was raised from 5% to 7% during the 3rd strategic business plan last
two years and this implies that the cost of fund on deposit increases by the same percent
while OCSSCO did not revise its lending rate and absorb the costs but other commercial
banks has revised their price and increased by the same percent. Decline to adjust the
result in decreasing of OCSSCO revenue by 2% for the last two strategic plan year. The
central bank set only the minimum threshold of deposit rate and left the other for markets.
As practically visible e commercial banks and MFIs pay above the threshold for some
saving products.
b) Lending interest rate: It is the amount that banks/MFIs charges on money that it lends.
One of the reasons that MFI costs higher interest rate is that it inevitably higher operating
costs for small-size loans as compared to typical bank loans. Though the nominal interest
rate of OCSSCO seems high the effective rate was acceptable because the company
applying decline rate of interest. OCSSCO did not revise its lending interest rate in the
past five years even when the government adjusted the deposit rate from 5% to 7%. In the
coming strategic business plan the OCSSCO should revisit the rate and adjust to its
32
continuously growing operating costs as well as cost of fund due to inflation and other
economic factors.
Devaluation: Devaluation is the reduction in the official value of a currency in relation to other
currencies. The National Bank of Ethiopia (NBE) has announced a devaluation of the country's
currency, the birr by 15% effective from October 11, 2017. It is obvious that devaluation has
long-run and short-run impacts on individual institution and on countries as well. The previous
devaluation has contributed to inflation and increase the cost of goods and services. Like other
institution it has impacts on OCSSCO. Although there is no indication of government measures
in connection with this, however, it is essential to consider its effect on company’s strategic
business plan.
Recession & Depression: Other economic factors like recession and depression paly significant
role in financial planning. Recession is widespread economic decline that lasts for at least six
months whereas depression is a more severe decline that lasts for several years. The two
economic factors arises uncertainly due to different factors like pandemic disease COVID-19
which disrupts the global economy and stock market crushes, deregulation and high interest rate.
The recession in Ethiopia affects microfinance mainly in delaying repayment, decreasing credit
demand and may be discouraging of saving. This strategic business plan consider this uncertainty
and its mitigation strategy.
Demand & supply: Like other firms, financial markets can be analyzed by using the theories
of supply and demand. Those who save money whether individuals or businesses, are on
the supply side of the financial market. Those who borrow money are on the demand side of
the financial market. With regarding these factors, demand and supply, OCSSCO has clear gaps
that should be addressed in this strategic business plan document, the market analysis show
higher credit demand in the market. The Microfinance credit market potential is high in the
region the company has been operating. Contrary to this, OCSSCO suffer from loanable fund in
its more than two decades operation. Therefore, it needs effective strategy on how the supply of
the loan rises to address at least major portion of the clients although it is very difficult to
maintain financial equilibrium by OCSSCO alone.
33
3.2.7. Socio-cultural Situations
A social environment includes the values, beliefs, customs, and practices of a group of people. A
business is subject to an external social environment and also its own internal social
environment. Studies show that that socio-cultural factors affect participation, loan repayment,
leadership and the survival of the groups. In the first place, social hierarchy in society
influences aspects of group formation, savings and even loan repayment in MFI loan groups
(2004). Hence Understanding of local culture is the main reason of the effectiveness of
microfinance
Macroeconomic factors have direct impact on the attractiveness of various strategies in the
organization. Because of this they have been seriously considered in the strategic business plan.
Among those factors, the followings are very essential during the strategic business planning.
Credit & saving culture: Culture plays the vital role in the industry of microfinance because the
industry mainly operates in rural area where the people is highly influenced by socio-cultural
beliefs. The existence of socio-cultural influence has impact on financial inclusion both credit,
saving and insurance services. According to National Financial Inclusion Strategy of Ethiopia
(2014-20), there were 19.3 million bank, 11.4 million MFIs accounts in 2016 which indicates
68 transaction accounts per 100 adults (15+ ages). The plan was to increase 90 transaction in
2020. The strategy document also state that in 2014 (Citing Findex 2014) approximately 56%
of adults reported not owning an account but either saving, borrowing or insuring themselves
against risks through informal means. 48% of adults reported that they saved or set money aside,
but only 14% reported has saving account at financial institution. 44% adults reported that they
borrowed money in some form with in the last year [2013] but only 7% reported borrowing from
financial institutions. This shows that majority of the adults in Ethiopia are excluded from the
service provided by the formal financial sector. As targeted on the financial inclusion strategy
document, the fingers may be changed and increased but there is gap in financial inclusion in
Ethiopia. People still going to local money lender to satisfy their credit demand. They continue
save their money in traditional ways. This is mainly because non-proximity of financial
institution, financial illiteracy, cultural influence and so on.
With regarding to credit, deterioration of repayment culture has been increasing in the loanee
clients of OCSSCO due to various internal and external factors and therefore it should get
34
emphasis in this strategic business plan to bring back to its earlier position. This habit is
completely against the deep rooted culture of the Oromo society. Repaying ones loan weather it
is in kind or cash is mandatory according to Geda rules and regulation. Installing this through
financial literacy help to secure the portfolio quality of the company.
Considering the national gap in financial inclusion and the cultural influences, OCSSCO should
work on accommodating the acceptable culture to fulfill the demand of the society and expand
its outreaches.
Geda System: People in the operational are of OCSSCO speaks Afan Oromo as their mother
tongue. Traditionally it is ruled by Geda Syatem and by the leader called Abba Gada who
remains in power for only 8 years. Understanding this system of governance and providing micro
financial services result in proper utilization of the credit, ensure repayment and brings about the
expected social changes.
Respect: Since our society is more traditional and multi-cultural with diverse norms, religions,
values and norms, treating them according to their culture is essential. Giving respects for
elders, religion leaders, women etc. developing products that also reflects their culture, norms
and language is also important to become effective in MFI operation.
Existence of Social Trust: trust has more value than formal contract in microfinance operation
as studies also confirmed. As, practically visible in OCSSCO operation, people need more trust,
respect, faith than aggressively enforcing law through group-by law to commit repayment. The
legal enforcement can may force them to retaliation.
Avoid cheating: Cheating, looting, bribery and other corruption means are condemned by the
Oromo society. They are honest, truthful but not tolerate what has not been accepted by their
culture. If somebody ask them for water they provide you milk for free. They leave bedroom for
guests for due respect. However, when they identify somebody engaged in cheating they know
what measures to be followed. Therefore, approaching these clients genuinely, lead the MFIs to
success.
HRM Practice: Effect of culture on microfinance institution’s human resources practice
mainly can be occurred when MFIs do recruitment of their staff. Many of microfinance
institutions make an effort to hire their staff from local community. This preferential hiring is
based on the reason that local staffs from local community are familiar with cultures where the
MFI located. Local staffs tend to instill confidence in clients and make it easier for them to
35
communicate with the MFI (Legderwood,1998). If the personnel are able to speak in the local
language, understand the local custom and traditions as well as have good social skills, they do
the marketing well and effective
In general, OCSSCO should give more emphasis to understand cultural orientation of the
society to properly manage the MFI. By understanding cultural aspects will contribute to the
success of microfinance practices.
36
As of OCSSCO, a huge has been invested and exerted all necessary efforts on acquiring
appropriate MIS. But with the so far greater efforts, OCSSCO couldn’t be successful in making
use of the intended technological services. The so far stared struggle for acquiring of reliable
MIS & Core Banking System solution will be continue till it will be confirmed.
In general the financial technology environment is very dynamic so that coping with this
environment is decisive for the survival of MFIs in the industry.
Customers Analysis: MFIs are considered as one of the world most powerful new solutions to
poverty eradication through financial service provision for economically poor people. As indicated in
country and regional profile section still significant percentage of Ethiopian households who live both in
rural and urban suffer from poverty and living below poverty line. Youths in general and particularly
those who annually graduates from higher learning institutions are exposed o unemployment unless they
are supported by providing finance to engaged in self-employment by creating jobs. Women, who is
shouldering high responsibility in the society needs financial access to engage in income generating
activities. Moreover, beginner entrepreneurs require financial access in order to expand their business and
exist in the high completion environment. The same is true for employees, small business operators and
those who want to construct dwelling houses. By and large, OCSSCO’s customers are those un-bankable
rural and urban households and small level business entities with expectation of accessing loans, deposits,
effecting payments, money transfers etc..
It is expected that these customers requires quality services from the company. Adequate loan
size, prompt loan processing, timely services, security for their deposit, instant saving acceptance
and withdrawal, reliable and timely transfer service, better treatment and handling, transparency
and the like. In this juncture, OCSSCO should revise its service delivery system to satisfy the
needy customers and achieve its mission.
37
3.3. Market Analysis & Planning
Market potential analysis is a strategic tool to identify market opportunities and invest resources
where they will have the greatest return in the long run. The estimation of the current population of
Oromia region is 37,267,000. (CSA.)
i. Projected population data by CSA for 2017 was used as a base for this projection. The
projection was made by rate of 2.54% annual population growth.
ii. Productive age group population of the country’s which is 15 – 64 years (CSA) is
considered from the total population
iii. From the above productive age group, numbers of economically active people are taken
employing economically active rate of the region in 2018 which is 71.59% (CSA). This
rate is assumed to remain constant during the projection period.
iv. From the total economically active population in the region, 25.56% (rural poverty
headcount index 2015/16 CSA) of them are assumed to be the microfinance credit
service seekers because they live below poverty line.
v. 10% contingency is considered because the population projection is less of the recent
Ethiopian population (World Bank estimation)
Based on the above assumption, the number of population in the region that seeks for
microfinance credit service is projected in the table below.
38
%age of MF 3,577,099 3,856,65 3,954,61 4,055,06 4,158,06 4,263,67 4,371,973
credit Service 6 5 2 0 5
Seekers
Contingency 10% 437
357,710 385,666 395,462 405,506 415,806 426,368 ,197
Total 4, 4, 4, 4, 4,809
3,934,809 4,242,32 350,077 460,568 573,866 690,043 ,170
2
The demand in terms of money value can be projected based on OCSSCO ‘s average loan size
growth trends. The average loan size growth in the last four years of the 3 rd strategic 18.95%.
The average loan size was inflated due to the high loan size for MSE product for the purpose of
this projection 10% annual growth was considered which is average group base loan size. The
demand is projected; the number of estimated credit service seekers is multiplied by the
average loan size of the company for 2018/19 Birr 9,738.11 plus 10% annual growth.
As shown on the above projection, in very conservative assumption, the expected number of
credit seeker population is greater than 4 million annually. OCCSCO has annually served less
than a million potential credit customer in the past service years. The MFIs operating in Oromia
collectively couldn’t have the capacity to serve half of OCSSCO. Therefore, Oromia has a
potential credit market that even couldn’t satisfy by OCSSCO. In addition to Oromia market,
OCSSCO can expand to neighboring towns and regional administration if it has the capacity.
Saving Markets
Oromia contribute 60% of Ethiopia’s GDP. The region covers the largest geographic area with
abundant natural resources and has potential for multifaceted investments and economic
39
activities. It’s also the most populous region in the nation. In parallel with the national economic
growth witnessed for the last ten years, Oromia is one of the regions possessing the higher
growth as well. Due to these facts, the saving potential of the region is described as huge but not
yet exploited enough.
As some data show, about 75% of MFIs in the nation operate in Oromia Regional State. As
currently observed since these MFIs are small in capacity and operational area they are not threat
to OCSSCO in sharing significant market of credit and saving. What should be taken into
consideration is that, first, existing small size MFIS are growing fast. Secondly the largest MFIs
has plan to expand their services to Oromia to seek potential markets. For instance ADCSI has
started to stretch its foot to towns around Finfine like Legetafo, Sululta, Burayou and sebeta.
The giant MFIs in the country, ACSI, seems to look at Oromia market. It has started to operate in
Finfinne and the second expansion region is expected to be Oromia because of reach credit &
saving potentials. The same may be true for DECSI in Tigray. Thirdly, new entry MFIs have
been loading to the Oromia market may be in better technology and service delivery. Fourthly
the support, operational, technical and financial, given to OCSSCO by government may be halt
at any time due to various reasons. Therefore, OCSSCO should take into account the ongoing
and coming stiff completion from the microfinance and act strategically to maintain its position
and have large market share not only in Oromia bat also in other regional state like Amhara
Oromia zone and other parts, Finfinne ( where OCSSCO gave no attention for the last two
decades) Benishangul Gumuz, Gambela, SNNP, Harari, Dire Dawa.
40
Commercial banks: Commercial banks and OCSSCO are the main competitors saving market
despite the fact that they have strong share and high market position in saving when compared
MFIs.
According to NBE, there are about 17 commercial banks in Ethiopia which have been operating
in the country for many years; more of them above two decades. Statistically, the oldest and
giant Commercial Bank of Ethiopia has over 1000 branches across the country. The main
operational area of the emerging Cooperative Bank of Oromia has been flourishing in Oromia
regional state. Awash Bank flooding the region of Oromia. Other banks are also the Oromia
potential saving markets. The banks influence OCSSCO for the time being in saving. Due to
their reputation, long time built up trusts, technology and instant service delivery, they have the
capacity to get rid of OCSSCO from the market unless otherwise strong competition capacity
will be built and all round service delivery shall be improved. The credit demand market has also
been attracting the banks with special reference to small and medium enterprises. They are
pointing to address these market via SME window services and this shall affect the credit market
of the MFIs in spite the fact that the market is wide-ranging to accommodate all.
Saving and Credit Cooperatives: In addition, the fast growth of cooperative associations in
rural and urban areas of the country as well as the region are becoming share takers in the saving
as well as credit markets. There are many cooperative associations known as ‘Savings and Credit
Cooperatives’ (SACCos) in Oromia. These SACCs provide loans to members from members’
savings. They mobilize savings from members and reimburse to members in need of credit with
relatively lower price. These Cooperatives aren’t independently functioning as formal and
bureaucratic financial institutions, rather they often work attached to other banks or MFIs
particularly for saving accumulations though their attachment with OCSSCO can be said poor so
far. The institutions with most advanced service delivery means and stretched accessibilities
were able to attract the SACCs.
In general, market shares of the institutions vary depending on their capital, outreach coverage,
reputations and level of supports from partners and governments. With this regard, government
affiliated banks and MFIs are found to obtain the greater shares than the private ones. For
example, the bank sector, Commercial Bank of Ethiopia is the highest market share taker
mobilizing most of the country’s financial assets. Not in the same scenario but the leading MFIs
in market share among the MFIs in the country are those government affiliated ones including
41
OCSSCO. This may be mainly because government and many other partners that work on social
development endeavors assist and work with the MFIs directly or indirectly.
Capital Goods Financing: Capital goods financing institutions area recent phenomena in
Ethiopia Financial service provision. The capital goods financing company has established in all
regional state of Ethiopia including the two city administrations and issue loans for machinery
equipment. In Oromia, Oromia capital goods financing company, is not strong to share the
market significantly.
Strengths Weakness
42
Lack of system that detect favoritism,
discrimination, injustice, enticement
Opportunities Threats
43
3. Radical operational expansion to maintain company’s sustainability & growth
4. Fundamentally improving the portfolio quality of outstanding loan through taking
strategic measures.
5. Focused physical resources acquisition and ensuring its professional management
6. Expanding company’s financial services to banking business (relicensing) in the 1st year
of the strategic business plan
Activities
Amending the HRMD policy & procedures in a way to ensure employees’ right and
responsibility as well as accountability in the first year of the strategic business plan
period; implementing accordingly.
Implementing all human resource management practices only according to company’s
HRMD policy, procedures and other pertinent laws.
Implementing standardized result based performance evaluation which entails reward as
well as punishment at all level to boost efficiency, productivity that result in profitability
of the company starting from the first year of the plan.
In placing good governance and respectful treatment in the overall human resource
management practices
Promoting trust and positive relationship between employees and managements through
training, mentoring etc.
Introducing a well organized system to recognize employee job performance
continuously with appropriate feedback, incentives and rewards in 2020/21.
Measuring employee engagement every year and take subsequent actions to attain the
maximum engagement level.
Bringing the working environments to the industry standard ensuring its safety and
suitableness for work.
44
Promoting appropriate work ethics, values and organizational citizenship behavior to
sensitize for higher commitment
Objectives 2. Automating human resource data and its overall management practices in the
first year of the strategic business plan period.
Activities
Objective 3. Applying continuous knowledge and skills gap assessment and implementing
capacity building programs to improve staffs’ efficiency, productivity
Activities
Conducting knowledge and skills gaps assessments in the third quarter of every year
Facilitating provision of induction as well as need based job specific training
Conducting training impact assessments on job after each training
Establishing evaluation and certification mechanism after each training; and the result
shall be kept in employees’ file which is to be considered during promotion and other
competitions starting from the first year of the strategic business plan.
Arranging experience sharing visit for BODs, top and middle level management and best
performing employees to increase the quality of leadership and management in selective
ways
Objective 4. Revising the current organizational structure to be compatible with the
company growth and business demands in 2023/24
Activities
Following, supervising, identifying and organizing any shortfalls of the current
organizational structure and HRMD policy manual in implementation
Conducting continuous internal and external business environment assessment and
analysis
Selection and hiring capable consultant firm
45
Objective 5. Fully Functionalizing the research and training center of OCSSCO at the end
of the strategic business plan period.
Activities
Fulfilling competent manpower in the 1st two strategic business plan year
Identifying appropriate training courses taking into account training demands from
internal and external financial institutions (banks & MFIs)
Selecting capable trainers from internal and external
Developing standardized training module for each training course in the 1st and 2nd year
Exercising applied researches in connection to company’s problems
46
Activities
Reviewing and strengthening the work unit structure that works to safeguard the security
of company’s system.
Revising (Modifying) and implementing a policy for our company system security that
governs its overall applications and administrations with clear duties, responsibilities and
accountabilities.
Implementing System Auditing on regular basis
Strengthening employees capacity through providing training
Conducting system quality survey on consistent basis
Implementing list privileges to all users who access company system based on their
assignment
Properly utilizing existing company security equipment and expanding it gradually from
head office through zones and branches
Change default configuration deployed with hardware and during software installation
Disabling all default configuration that exist on our IT resources
Implementing licenses for mission critical IT resources either for hardware or software
Activities
Conduct gap analysis of existing CBS in the 1st year of the SBP.
Preparing bid document and others for new CBS purchase in the 1 st year and procuring
the system in the 2nd year
Planning the transition tasks from existing to new system to minimize challenges of
transition during 2nd year
Ensuring quality of data in the existing system before transition
Organizing Request for Proposal (RFP) for new system implementation
Implementing, monitoring and enriching the system to attain the maximum benefit of it.
Working on different alternate banking system in parallel to new core banking like
internet banking, mobile banking, interfacing our new core banking to other
organization, ATM service etc.
47
Properly and effectively using platform acquired from technology provider like M-Birr or
strategically exiting this service
Objective 2.4. Standardize company network and upgrade or expansion of existing data
center
Activities
Using standardized network materials for company LAN
Technically performing inventory on material deployed in data center either hardware or
software and work on upgrade or expansion
Identify outdated spare parts and services of data center and timely replacing them.
Working on virtualization technology to minimize number of servers deployed in the data
center
Establishing strong data center management system to mitigate associated risks
Goal III. Radical operational expansion to maintain company’s
sustainability & profitability
Objective 1. Achieving above 5 billion net profit at the end of the strategic plan year through
increasing productivity and proper cost management.
Activities/strategies
Objective.2 Increasing each year annual disbursement by 50% from the base line year birr
8.33 billion to reach 63.22 billion at the end of the strategic business plan.
According to microfin projection, the disbursement of the next five year will presented below.
Projected
Year Remarks
Disbursement (Birr)
48
2019/20 8,325,763,560 Baseline year
2020/21 16,739,445,678.00
2021/22 24,234,058,332.00
2022/23 33,078,579,503.00
2023/24 45,095,291,404.00
2024/25 63,218,396,035.00
Activities/strategies
Objective. 3 Increase branch networking from the current 392 to 687 branch offices by 2024/25
by opening 59 branches each year; and opening 100 sub-branches on average 20 sub branches
each year
Activities
Splitting the existing huge branches to branches & sub-branches for market
deepening and maintain operation quality
Opening branches and sub-branches in new potential and commercial areas within
Oromia
Expanding to neighboring regional states and city administrations by opening
branches
Objective 4. Introducing additional new products and refining of the existing products on
regular basis so that marketable products shall be maintained and non-profitable products
should be dropped from operation.
49
Activities
Refining the existing products to make it suitable to customers regularly
Conducting product fitness assessment in selected geographical areas and develop
appropriate products and operationalizing it
Introducing new products up on market research as demanded
The projected savings to be mobilized in the strategic period year is forecasted as stated on table
below.
Activities/strategies
Increasing the number non borrower depositors’ from the current less than one million to
3,277,382
Capacitating program level staffs to shift from credit-led mentality to saving led.
Making branches to cover its disbursement by saving mobilization with minimum loan to
deposit ratio of 80%
Implementing saving mobilization strategies that map saving areas and intend to realize
broad community based saving mobilizations
digitalized payment system that fit with the current financial services in 2021/22 FY
Objective 6. Retaining existing customers and acquiring quality clients to ensure financial
access.
Activities/ Strategies
Reducing the annual client dropout to less than 5% in providing quality and
instant services to retain them
Serving new clients by opening new branches in commercial & potential areas
Objective 7. Increase the number of women borrowers from the existing 38% in 2019/20 to
at least 50% by the end of the plan period annually increasing by 2%.
Activities
Developing and/or modifying products that fit financial services needs of women
Setting affirmative interest rate for women based on research to initiate them to take
loan and run small businesses
51
Assigning targets to zones and branches
Selecting some zones and branches in places where women business engagement is
high to focus on ensuring financial access.
Objective 8. Increase yearly borrowers clients outreach from the current about 752,554
clients in 2019/20 to 2,310, 782 clients by the end of the plan period to enhance financial
service access.
Strategies
Goal IV. Fundamentally improving the portfolio quality of outstanding loan through
taking strategic measures.
Activities/strategies
Putting in place proper client targeting, screening, training and loan follow-up
mechanism
Ensuring proper data capturing and management at all level and maintain consistent
quality reporting
52
Improving loan processing capacity of CROs through training and attaching
responsibility for non-replayed loans due to their negligence, breach of policy,
misconduct etc
Identifying products with repayment problems and take appropriate measures through
research.
Enacting legal measures on clients who fail to timely repay the matured loan
according to the agreement entered between the two parties.
Activities
Identifying loan for write-off as per company policy and regulatory body
direction
Activities
Discussion with domestic & international stakeholders on the importance of the issue and
the international practice
53
Development of credit guarantee fund manual/policy
Goal-V. Focused physical resources acquisition and ensuring its professional management
Activities
Objective 2. Acquiring sites and constructing mixed purpose buildings for office and
income generating
Activities
Finalizing the building design of Bole, Lege Tafo, Bedelle and Arboye; and entering
into construction in the first year of SBP period and completing within 30 months.
Completing the building designs of Odaa Tower Expansion, Agaro and Jima sites in
the 1st year; and starting construction in the 2nd year of the plan to be finished the 4th
year SBP.
Completing design works of RTC and Gandhi Buildings in the 3nd year; and
commencing their first phase constructions in the 5th year.
Acquire the research and training center (RTC) site at Gelan town;
Activities/ Strategies
54
Introducing information system based property management
Capacitating the property admin staffs in order to enable them implement effective
property administration
Activities/ Strategies
Establishing mini maintenance pool at selected locations which may serve 3 or more
zones
Establishing warehouse for each pool and supplying adequate spare parts in advance
Strategies
Developing and implementing procurement manual in the first year of the SBP
period.
Strengthening implementation capacity of the work unit through training the staffs
and procurement committee members
Goal- VI. Expanding company’s financial services to banking business (relicensing) in the
1st year of the strategic business plan
55
Objective- 1. Fulfilling preconditions to start the banking business
Strategies
Strategies
56
objectives. For the efficient achievement of this strategy, it is important to consider the following
enablers.
Strategic Leadership: Strategic leadership is one of the determining factors for the success of
this strategic business plan. Strategic leadership as its name indicates a managers potential to
express a strategic vision for the organization and persuade fellow employees to acquire that
vision or to undertake necessary actions toward the success of the vision. In this regard, the
company’s executive management, top and middle level management leadership role would
empower other followers to strive for better success.
Integrity: Integrity, which is the quality of being honest and having strong moral principles,
contributes highly for the success of this strategic business plan. The integrity of employee’s,
management members and senior executives for each other’s, the company and the clients in
general shall be considered as a corner stone for the achievement of this strategic business plan
and one of the pillars of the success factors.
Stability: Peace and stability are important in promoting economic development of individuals
and society. Political stability is critical to progress and development since it affects all aspects
of a country’s development. Hence, Stability of the country as well as the regional state of
Oromia remain always important for the implementation of the strategic business plan.
Maintaining rules and orders, sound functioning of government administrative structures, and
government securities, justice institutions, social stabilities are among the enablers of the plan.
57
the conducive environments that enable OCSSCO to achieve this strategic business plan goals
and objectives.
Governance Commitment: Deep commitment all level governance from general Assembly to
the lowest structure contributes for the achievement of the strategic business plan. Particularly
the roles of the Board of Director, Executive Management and top management are so
determinant extra ordinary efforts are expected from them.
Collaboration: The action of working with partnerships and stakeholders will support the
implementation of this strategic business plan. Creating smooth relationship and closely working with
government structures, agencies, local and international partnerships are key strategic enablers of
this plan.
58
a) Strategic Risk: According to NBE, strategic risk refers to the potential negative impact
on a microfinance institution’s earnings and capital. It arise in circumstances where
decisions taken by the organization is not right. Strategic risk relates to a microfinance
institution’s ability to effectively, efficiently and prudently respond to business
opportunities in a manner that reflects a strong vision and the ability to employ the
resources necessary to achieve organizational goals in a profitable and sustainable
manner. This is one of the critical risk areas in OCSSCO, which need special attention.
Risk avoidance, risk acceptance, risk control/reduction and risk transfer are the most
common risk mitigation strategies in business organizations. With regard to strategic risk
mitigation, OCSSCO strengthen the governance structure and implementation capacity;
provide trainings, implements regular monitoring and evaluations etc;.
b) Credit Risk: It is the possibility of a loss resulting from a borrower's failure to repay a
loan or meet contractual obligations. Credit risk, according to NBE, is the risk to
earnings or capital due to borrower’s late and non- repayment of loan obligation. Credit
risk encompasses both the loss of income resulting from the MFI’s inability to collect an
anticipated interest earnings as well as the loss of principal resulting from loan defaults.
Some literatures refer concentration risk as credit risks. The credit risks in the
microfinance industry are often amplified, mostly, by two main factors: (i) lack of a
collateral pledge by borrowers; and (ii) the information asymmetry between borrowers
and lenders. (Emekter et al., 2015).
In the implementation of this strategic business plan, late or non-repayment of loan may
be encounter due to various reasons such as poor loan management and follow up,
changes in weather conditions, social unrest, epidemics/endemics etc.
To mitigate credit risks, client screening, and training, monitoring and continuous follow
up will be strengthened at program level. Group co-guarantee procedures shall be revised
and in strongly reinforced. Various forms of collateral and guarantees (including physical
collateral, personal guarantees etc.) could also be used and collateral valuation training
shall widely offered to respective staffs. Emphasis shall be paid for individual credits
transactions to strengthen the borrower’s repayment capacity.
c) Liquidity Risks: Liquidity risk is the risk of being unable to meet commitments like
repayments and withdrawals at the correct time and place. Failure to withdraw clients’
59
savings, and inability to commit repayments of loan obtained from different sources are
common liquidity risks in financial institutions including MFIs. OCSSCO, as a
microfinance institution, mobilizes saving from voluntary and compulsory sources and
committing withdrawal at time of request is mandatory. Similarly, the company has
accessed concessional as well as commercial loans from various sources and expected to
accesses the same during this strategic business plan.
To avoid liquidity risks, the company must keep an up-to-date balance sheet that includes
accurate data on their current assets and liabilities. Identifying liquidity risks early and
monitoring & control liquidity on Regularly basis are used to mitigate the risks,.
Moreover conducting scheduled stress test and creating a contingency plan are among the
mitigation strategies. Managing liquidity risk through controlling concentrations and
relative market sizes of portfolios in the case of asset liquidity risk, and managing
through diversification, securing credit lines or other back-up funding, and limiting cash
flow gaps in the case of funding liquidity risk is common practice in financial
institutions.
d) Interest rate Risks: Interest rate risk is the exposure of microfinance institutions
financial condition to adverse movements in interest rates (NBE). Interest rate risk is
the risk that arises when the absolute level of interest rates fluctuate. Interest rates
changes on both lending and borrowing rates impact on profits especially in the short
term. Increases in cost of funds affect margins adversely, thereby affecting profitability
and operational self-sufficiency (GTZ, 2004).
With regarding OCSSCO practice the interest rate has been remained stable and will be
expected to be stable. However, in case of changes in interest rate changes that causes
interest rate risk is occurred, adjusting the business to the changeling environment is one
of the mitigation strategies. Accepting the risk is also another means that is common in
businesses. Conducting re-pricing is also another strategy to mitigate risks in this area.
60
confirmed Operational risks impact the reputation and financial stability of a business
significantly and leads to legal risks. Some of the operational risks are, business
interruption errors or omissions by employees, product failure, health and safety, failure
of IT systems, fraud, loss of key people, litigation, loss of suppliers. NBE Risk
Management Guideline the following as common operational risks in MFIs.
1. The MIS system does not correctly reflect loan tracking, e.g. information on amount
disbursed, payment received, current status of outstanding balance, aging of loan by
portfolio outstanding etc..
2. Lack of effectiveness and insecurity of management information system in general and
the portfolio management system in particular e.g. software does not have internal safety
features, inaccurate MIS and untimely reports.
3. Inconsistencies between the loan management system data and the accounting system
data.
4. Treating rescheduled loan as on-site loans
5. Lack of portfolio related fraud controls
6. Loan tracking information is not adequate, e.g. no aging of portfolio outstanding,
inadequate credit histories etc.
To mitigate or reduce operational risks; implementing effective task segregation is important to
prevents one individual from taking advantage of the numerous aspects of transactions and
business processes or practices. Curtailing complexities in business processes, curtailing
complexities in business processes which help to reducing work process is another operational
risk mitigation strategy. Reinforcing organizational ethics
within the company is highly effective in mitigating operational risks management. Assigning
the right people for the right job can reduce difficulties pertaining to business process execution
and skill and technology usage. This also results in appropriate workforce utilization, adherence
to timelines, enhanced quality, and fewer errors and process breakdown.
Strengthening monitoring and evaluations at regular intervals, conducting periodic risk
assessment and taking appropriate measures are very important. In addition, implementing
appropriate MIS highly reduces the risks in this regard.
61
Business plan implementation in order to track and measure progress (and success) in achieving
the goals. The main purposes of the M&E system for the five years strategic business plan are to
outline various roles and responsibilities regarding M&E with a view to tracking progress and
demonstrating results and to use it as a tool for monitoring progress both in physical and
financial terms.
Monitoring & evaluation system will allow OCSSCO management and its partners to assess
more effectively, how far the strategic goals and objectives are being achieved. It also outlined
specific steps and tools for informed decision making; develop plans for data collection, analysis,
use, and data quality; to carry out oversight activities and evaluation; and organize various M&E
activities that must take place for tracking progress towards achieving results in a sustainable
manner
Taking these justifications into account, effective monitoring & evaluation will be implemented
at Board of Directors, top management, middle level management & employees level so as to
achieve the strategic goals & objectives set in the five year strategic business plan of the
company.
62
Deputy- Operations: Deputy Operations is responsible for continuous
monitoring & periodic evaluation of the implementation of operational targets.
Therefore, it will annually cascade targets for zones in consultation with
Corporate Strategy and Transformation and establish individual result based plan
at all level and conduct appraisal on result basis.
Deputy- Resources: Deputy Resource work unit is one of the main support for
operation and have responsibility to carry out some aspects of the strategic
business plan particularly in connection with owning fiscal resources. Hence, it
ensures the supply of logistics, fulfilment of manpower, financial management.
Corporate
Deputy Corporate strategy and Transformation: This work unit along with its
subordinate directorates conduct evaluation of the implementation of the strategic
business plan against organizational objectives and goals. The evaluation is
conducted after elapse of each fiscal year and on the fourth year of the strategic
business plan to provide inputs for the 5th strategic business plan.
Corporate Planning & Strategy Directorate: The directorate is responsible to
drive the annual plan from the strategic business plan of the company and timely
communicate to zonal and branch offices in coordination with responsible
directorates. In addition it continuously monitor and periodically evaluate the
implementation of this plan through supervision, controlling, reporting and
feedback.
6.1.2. Evaluation
The evaluation of the implementation shall be done every year taking into account the objectives
set and the impact it brings about on the organization goals and objectives. This shall be
63
performed by research team of the company to maintain independency of findings and avoid
bias.
64
65
66
Annexes
67
Client outreached by year
Term Loan Projections Client Outreach by Year
Year 1 Year 2 Year 3 Year 4 Year 5 5 YEAR
FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 TOTAL
Term Ln Prod 1: Rural Group Based 658,469 941,623 1,195,149 1,314,680 1,446,165 5,556,086
Loans *
Term Ln Prod 2: Urban Group Based 49,174 83,807 116,678 136,797 160,940 547,396
Loans *
Term Ln Prod 3: Urban Enterprises 25,433 35,606 53,410 82,787 132,460 329,696
(UMSEs) *
Term Ln Prod 4: Rural Enterprise 32,682 49,024 75,988 121,583 194,535 473,812
(RMSEs) *
Term Ln Prod 5: Business Loan * 5,378 7,529 10,540 14,757 20,659 58,863
Term Ln Prod 6: WEDP loan * 1,162 1,859 2,975 4,760 7,616 18,372
Term Ln Prod 7: General Purpose 8,714 13,725 20,588 30,883 46,325 120,235
Loan(Gov. *
Term Ln Prod 8: Housing Loan 2,927 5,269 8,430 13,488 21,581 51,695
(Gov.Emplo) *
Term Ln Prod 9: ABIL (Graduated 16,695 40,069 96,163 171,716 276,960 601,603
Farmers) *
Term Ln Prod 10: Company's Staff 1,708 2,049 2,459 2,951 3,541 12,708
Loan *
68
Yearly Loan Disbursement Projection
S/ Term Loan
N Projections Year 1 Year 2 Year 3 Year 4 Year 5 5 YEAR
Term Ln Prod 6:
262,597,113 385,890,736 476,827,800 686,400,271 1,201,276,352 3,012,992,272
WEDP loan *
6
Term Ln Prod 7:
General Purpose 217,099,067 402,572,718 476,923,110 642,120,975 1,066,070,438 2,804,786,308
7 Loan(Gov. *
Term Ln Prod 8:
Housing Loan 229,845,710 493,637,372 616,613,498 901,455,636 1,357,173,026 3,598,725,242
8 (Gov.Emplo) *
Term Ln Prod 9:
ABIL (Graduated 454,090,549 1,197,630,415 2,388,528,922 3,958,079,501 6,398,524,135 14,396,853,523
9 Farmers) *
Term Ln Prod 10:
Company's Staff 146,193,340 127,952,306 135,798,296 145,122,516 156,266,096 711,332,554
10 Loan *
16,739,445,67 63,218,396,03
Total 24,234,058,332 33,078,579,503 45,095,291,404 182,365,770,951
8 5
Loan to Deposit
Ratio (LDR) 159.76 78.95 80.91 81.40 82.36 85.13
69
Yearly Loan Portfolio Projection
70
Yearly Compulsory saving Projection
Compulsory Savings Projection
71
(RMSEs)
Term Ln Prod 5:
5 Business Loan 290,412,000 406,566,000 569,160,000 796,878,000 1,115,586,000 3,178,602,000
Term Ln Prod 6:
6 WEDP loan 125,496,000 200,772,000 321,300,000 514,080,000 822,528,000 1,984,176,000
Term Ln Prod 7:
General Purpose
7 Loan(Gov. 18,822,240 29,646,000 44,470,080 66,707,280 100,062,000 259,707,600
Term Ln Prod 8:
Housing Loan
8 (Gov.Emplo) 6,322,320 11,381,040 18,208,800 29,134,080 46,614,960 111,661,200
Term Ln Prod 9: ABIL
9 (Graduated Farmers) 180,306,000 432,745,200 1,038,560,400 1,854,532,800 2,991,168,000 6,497,312,400
Term Ln Prod 10:
10 Company's Staff Loan 5,533,920 6,638,760 7,967,160 9,561,240 11,472,840 41,173,920
40,896,594,35
Source 1: Sub Total 3,156,529,257 4,810,936,533 7,255,762,894 10,438,156,166 15,235,209,507 7
Source 2: Non-Term
Borrowers
Segment 1: NLB 78,541,420,64
1 Individuals 3,299,454,809 11,747,129,837 14,898,201,026 20,033,563,588 28,563,071,387 7
Segment 2: 61,054,967,06
2 Organizations 1,869,691,058 10,003,314,782 12,686,621,891 16,089,704,114 20,405,635,220 6
Segment 3: Local
3 Orgas.Idi 329,945,481 1,035,510,260 1,166,838,880 1,479,833,835 1,876,787,119 5,888,915,575
Total Saving Projection ( Vol. & Com) & Loan to Deposit Ratio
72
2020/21 16,739,445,678.00 1,769,731,508.00
8,708,250,213.00 10,477,981,721.00 159.76
73
- - - - - -
Term Ln Prod 7: General
7
Purpose Loan(Gov. - - - - - -
Term Ln Prod 8: Housing
8
Loan (Gov.Emplo) - - - - - -
Term Ln Prod 9: ABIL
9
(Graduated Farmers) - - - - - -
Term Ln Prod 10:
10
Company's Staff Loan - - - - - -
Staffs Projections
74
1 Customer Relations 176,785,092 184,639,037 242,285,168 311,970,994 377,306,386 1,292,986,677
Intermediate Customer
8 Service Office 20,140,032 20,579,328 20,849,664 21,255,168 21,626,880 104,451,072
Customer Sservice
10 Officers (704) 66,012,054 69,523,744 72,765,304 76,547,124 79,788,684 364,636,910
1,020,500,1 1,140,072,1
Total 723,276,805 785,793,219 896,985,266 06 00 4,566,627,496
75
ZO - Interm. Officers (40) 50.0 50.0 50.0 50.0 50.0
ZO - Officers (50) 11.0 11.0 11.0 11.0 11.0
ZO - Junior Officers (11) 70.0 70.0 70.0 70.0 70.0
ZO - -Data Encoders (70) 19.0 19.0 19.0 19.0 19.0
ZO - Secretary (19) 4.0 4.0 4.0 4.0 4.0
ZO - Mechanics (4) 19.0 19.0 19.0 19.0 19.0
ZO - Drivers (19) 35.0 35.0 35.0 35.0 35.0
ZO - Guards (35) 19.0 19.0 19.0 19.0 19.0
ZO - Janitors (19)
76
ZO - Drivers (19) 7,855 7,855 7,855 7,855 7,855
77