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Lesson 5

Collecting and analysing financial information from micro enterprises

In this lesson you will join Ricardo as he starts working for RUMFI, the Rural Microfinance Institution. He is about to make his first field visit to meet some clients. His supervisor wants him to collect enough information to put together a balance sheet and a profit and loss account for each one and use these to work out how each business is doing.

Picture of Kanchan, the shop keeper

Before he starts he learns some important interviewing skills from his colleague, Stefan, and then sets off to meet Kanchan who owns a small shop, Ali who is a carpenter and Lewis, who is a farmer. Ricardo collects some financial information from each business and you are then asked to help him construct some simple accounts for each one. If you are not familiar with balance sheets and profit and loss accounts, you should work through Lesson 4 before attempting this.

Picture of a calculator

After constructing the accounts, you will learn how to calculate some ratios that help you to analyse the performance of each business and give advice to the owners. Ricardo is amazed how much you can learn from simple accounts and what a good way it is to build up good relationships with customers.

The figures used in this lesson are highly simplified to make calculations quicker and dollars are used as the currency symbol.

Teach yourself about micro finance with these free, interactive lessons.

There are 15 lessons so far, and each one should take you about an hour to complete.

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