English Français Español

Lesson 7

Understanding the accounts of financial service providers

Picture of Anya working at her computer

Nobody is in any doubt that money lending is a business activity, so that means savings groups, banks and microfinance institutions should all have accounts which can be analysed like any other business. Where does their money come from and what do they do with it?

In this lesson you will join Anya who works for an NGO in Povertia. She is finding out about the business of money lending by visiting and constructing accounts for different types of financial service providers.

Picture of a meeting between Anya and a savings group

Go with her to visit Grace’s savings group, a branch of Povertia Rural Bank and MUMFI, a specialised microfinance institution. You will need to help Anya construct balance sheets and profit and loss accounts for these institutions, so do work through lessons 4 and 5 first if you are not familiar with simple accounts.

Anya finds out that you can calculate special ratios to interpret the accounts of financial institutions and microfinance providers can compare their ratios with those of similar institutions in the Micro Banking Bulletin!.

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.

If this is your first visit please read the About page - otherwise just click a lesson title to begin.

If you have any comments or suggestions, please click on our Feedback link, or contact the Lessons Manager.. Copyright © 2010, RFLC.