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Financial Performance Management Boosts Charity Mission

Opportunity International taps Oracle/Hyperion software to deepen analysis and speed financial reporting.

Faster and deeper analysis and reporting breeds better corporate financial performance, but in the case of Opportunity International, these benefits actually make a difference in people's lives. As a charity that specializes in microlending to the world's poor, Opportunity has to make the most of its capital, and better decisions about where and how to lend have helped it extend its reach to 1.1 million aspiring poor people in 28 countries around the world.

Better financial reporting has helped Opportunity International better serve clients such as Beatrice Kitaara of Uganda. A small loan helped her and her husband plant more crops and buy a cow so they could sell milk for steady income.
Opportunity loans start at as little as $50, and its average outstanding balance is just $150. Conventional financial institutions shun such small-scale lending, as well as the clientele that Opportunity serves, but even small amounts can help a poor person with an entrepreneurial spirit invest in crops, livestock, a retail stall, a sewing machine, a potting wheel or the seed of another type of small business that can lead to financial stability.

Because laws and regulations vary from country to country, Opportunity works through 45 different partners, some structured as banks or savings and loans, and some as non-bank finance companies. Some partners are majority- or minority-owned by Opportunity while others work under contract.

"We have to be flexible and sensitive to the local environment," explains Tim Head, Opportunity's Management Information and Performance Reporting Manager. "The challenge this presents is that we have to deal with 45 different charts of accounts and 15 to 20 different languages."

Until a few years ago, Opportunity relied on manual methods to collect quarterly financial statements and portfolio activity reports from its partners. The reports were stored in Microsoft Excel, and all 45 had to be manually transformed and mapped to a common format and centralized chart of accounts.

"It was a very inflexible and inefficient approach," Head admits. "We knew we had a tremendous amount of information, but we didn't have the tools to make business use of it."

In 2005, Opportunity implemented Hyperion Essbase in order to deliver much more flexible and sophisticated reports and analyses. In place of its old "one-size-fits-all" reports limited to about 20 financial performance measures, Opportunity can now slice and dice current and historical data and deliver much more targeted insight, says Head. "We can produce a dashboard-level report for a CFO focused on financial measures, and a different report for the operations manager that is much more focused on local performance," he explains. "We can also calculate much more sophisticated ratios. For example, sometimes we work in hyper-inflationary countries, and we can now calculate inflation-adjusted return on equity."

The non-for-profit is also doing more trend reporting, looking at two to three years' worth of performance data on client retention, for example, so it can adjust products and underlying financial performance. And instead of looking at partners only through a geographic hierarchy — the only approach previously practical — Opportunity can now look across countries and regions to compare organizations that have similar business structures or that are at similar stages of development; this helps central managers plan and local operational managers gauge where they stand versus current and historical benchmarks.

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