Microfinance Institution ModelFree Financial Model Download
Project a microfinance institution over seven years: loan book by group and individual product, branch and loan-officer economics, deposit and debt funding, capital adequacy, and the ratios that decide whether the MFI is operationally self-sufficient.
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About this model
A microfinance institution (MFI) model projects the financial profile of a lender to underbanked borrowers — small ticket, short tenor, with a portfolio split between group (solidarity / village-bank) and individual loans. The two products have different yields, different average loan sizes, and different credit profiles, but in this template they share a single roll-forward: opening loan book → grow at a target growth rate → write-offs (negative) → net new disbursements (the plug) → closing loan book. Average balance flows into interest income; net new disbursements drive upfront fee income. Blended yield is portfolio-mix-weighted.
Provisions are computed as average loan book × PAR > 30 days × LGD, so the income statement reflects expected credit losses rather than just realised write-offs. Branch operations scale separately: branches grow at a steady annual pace, loan officers scale with branches, and active loan count is derived from group and individual outstanding divided by average loan size. The officer-utilisation line surfaces the point where productivity becomes the binding constraint on book growth. Operating expense splits into branch cost, loan-officer compensation, and HQ overhead that grows with inflation.
Funding is sized from the loan book — deposits and debt as ratios of book — and equity is the balancing plug, accumulating retained earnings on top of opening equity. Risk-weighted assets equal the loan book times a density assumption (so a 75% density on a $100M book gives $75M of RWA), and the capital adequacy ratio (equity / RWA) is compared against a target minimum. The Returns sheet then reports the headline ratios institutional investors and regulators care about: ROA, ROE, net interest margin, cost-to-income, operating self-sufficiency (OSS — revenue divided by all costs), PAR ratio, provision coverage, and per-branch productivity. The Checks sheet verifies the balance equation, sign of the loan book and CAR, the bound on PAR, and that the product mix sums to one.
Recolor to your brand.
Formatted to IB standards.
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with blue inputs, black formulas, and green cross-sheet links.
- Brand-ready
- Institutional grade
- Fully auditable
What's included
- Portfolio mix between group and individual lending with separate yields and average loan sizes
- Loan book roll-forward: opening, growth-driven target close, write-offs, net new disbursements, average balance
- Branch and officer build-out with utilisation against active loan count
- Income statement with interest income, upfront fees, deposit and debt funding cost, loan-loss provisions, tax
- Funding mix sized from the loan book — deposits, debt, retained earnings — with capital adequacy versus a target
- Returns sheet: ROA, ROE, NIM, cost-to-income, OSS, PAR ratio, provision coverage, per-branch productivity
- Checks sheet — funding balance, loan-book sign, PAR bound, CAR sign, mix sum
Built for MFI underwriting
DFIs, impact funds and bank treasuries underwriting microfinance need to see the loan book, branch economics, funding mix and capital adequacy in one place. This template puts them on adjacent sheets that tie cleanly together.
Designed for two-product portfolios
Group and individual lending have different yields, ticket sizes and credit profiles. The model keeps them separate on the inputs and merges them via a blended yield, so a shift in mix flows straight through to NIM and provisioning.
Audit-friendly mechanics
Every driver is a named range. Every formula is one or two operations. The workbook passes static-value, self-reference, dead-assumption and circular-reference scans at 100%.
Frequently asked
What is a microfinance institution model?+
It is a lender model for an MFI — a financial institution that originates small, short-tenor loans to underbanked borrowers, usually split between group (solidarity / village-bank) and individual lending. The model projects the loan book, branch economics, funding mix and capital adequacy over a multi-year horizon.
Does it cover both group and individual lending?+
Yes. Portfolio mix percentages plus per-product yields and average loan sizes drive a blended yield. Set Group Loans to 100% to model a pure group MFI, or invert to model an upmarket individual-lender.
How are provisions calculated?+
Provisions = average loan book × PAR > 30 days × loss-given-default. PAR captures the at-risk balance, LGD converts it into expected loss. Write-offs are a separate, smaller flow on the loan book itself.
Why is the capital adequacy ratio so high in the default run?+
The model balances funding by deriving retained earnings as the plug, on top of opening equity. With deposits and debt sized off the loan book, equity ends up roughly 30% of assets — high by commercial-bank standards but realistic for an MFI building capital before scaling debt.
Can I extend the horizon beyond seven years?+
Yes — the builder is parameterised by NUM_PERIODS. Bump it and rerun and every sheet reflows.
Alex Tapio
Founder of Finamodel • Professional Financial Modeller • Ex-Deloitte
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