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My Fisher Internship
Second Week @ HOPE International

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Second Week

June 8-11

I’m ready to hit the ground running starting the first full week. During my touch base with my supervisor I was given the opportunity to create a new model for consolidation going forward for all HOPE’s entities. I was somewhat overwhelmed at first, but was excited for the challenge.

HOPE owns a small rental company, a benefit real estate company, an investment fund, and the HOPE microfinance umbrella organization. I won’t get too technical for those that aren’t accounting majors, but in a nutshell I needed to combine all the financial statements and reconcile all transactions between the entities because they are nullified in the roll-up. I had a two week deadline as the auditors were coming in for the year end audit. (This was going to be especially difficult because usually in audits the information is simply on a roll forward where accounts are the same and the only difference is the transaction amounts. This would have made it simple because I would have had last year’s statements as an example and could tie back for a control measure.) Through my accounting classes and financial modeling training I was able to start the project with little guidance. For those of you that need to take Acct 522 fir your major, I’m going to make a shameless plug here. You need to take Teri Ziegler’s class. Even though it can be intimidating and quite difficult at times, you will learn so much. Her class helped refine my accounting skillset for the real world.

In addition, I was able to organize the model in a more efficient way with my financial modeling training. This mostly included formatting and notations, but would help the auditors trace accounts more easily to tie back numbers.

I spent most of the week working on this project, but I also have another exciting culture update to share. Every Monday the firm opens one of its conference rooms for prayer and every Tuesday we have devotions. I thought being a Christian organization was awesome enough, where our work was holistic in the approach of bringing the gospel to our clients through relationships, but I never imagined a culture so intertwined with its beliefs! We are constantly reminded our work is not for ourselves or even for the social cause of defeating poverty, but instead for God. Now, that’s an interesting concept to throw into organizational behavior. (Not, sure if Professor Wilk reads this, but if you are I expect a comment on this idea!)

Learning points:

  • Prioritization: Building off on last week’s topic of deadlines I’ll touch base more about prioritizing your work and goals. In Business Administration 499 we learn about the priority matrix from Steven Covey’s “7 Habits of Highly Effective People.”
I. Urgent and Important    i.e. Crisis II. Not Urgent and Important     i.e. Planning
III. Urgent and Not Important      i.e. E-mail IV. Not Urgent and Not Important       i.e. Busy Work

Most people spend their work time in Quadrants I, III, and IV. The goal however, is to spend your time in quadrant II as that will also minimize quadrant I. You won’t be able to eliminate every task, however try to screen Quadrant III items and discard IV items as necessary to make most efficient use of your time. This will not only help you achieve your goals more efficiently but also allow you to have more responsibility and impact on your organization.

  • Formatting is extremely important in the business world due to the significance of communication. In academics most professors do not stress the presentation of ideas, rather only the content of idea itself. However, in real life if you cannot communicate your ideas, they may as well never have been created. Thus, learn how to format reports, powerpoints, and excel documents! The best examples are usually things you can find from previous documents at work, or if you don’t have any precedents to use look online for similar documents by reputable corporations. Formatting should be concise, clear to read, and be able to highlight significant information. An example of this could be color coding or indenting in excel. Note: you need to be careful formatting does not get excessive; projects aren’t “art projects.” A good resource for fast formatting excel shortcuts is .

Microfinance points: This week I want to introduce the concept of “PAR” or portfolio at risk discussed in our weekly staff meeting. In a nutshell, PAR is a control metric for measuring the risk of funds, or in HOPE’s situation its microlending portfolio.

  • What is PAR?
    • Portfolio at risk is defined as the value of all loans outstanding that have at least one installment of principal past due.
  • Key Concepts
    • Includes the total outstanding value of the loan
    • Looks at the principal, not interest
    • Different from Arrears Rate
  • How is PAR calculated?
    • Portfolio at Risk > 30 days + (Value of Renegotiated Loans Gross Loan Portfolio / Gross Loan Portfolio)
    • The most common measure of PAR is >30 days
    • It is important to note that this ratio does not provide any information about WHY clients are delinquent.
  • Example:
    • Say I take out a loan for $1,200 and am repaying the principal at a rate of $100 each month.
    • I miss my monthly payment in month four
    • How much of Micah’s loan has been paid back?
      • $300
    • How much of Micah’s loan is still outstanding?
      • $900
    • What is the value of payments in Arrears?
      • $100
    • What is the value of Portfolio at Risk?
      • $900
  • What drives PAR?
    • Changes in client delinquency
      • More clients begin repaying late
      • Institution renegotiates loans for delinquent clients
    • Growth or contraction of the loan portfolio
      • This can mask problems in portfolio
  • One of the current challenges in the microfinance industry is finding ways to reduce or prevent volatility in PAR.
    • What do you think are some ways to do this?
      • I will provide some industry responses in next week’s microfinance points, but I’m curious to see what ideas you have.

5 Responses to Second Week @ HOPE International

  1. jhart says:

    I think microfinance is really interesting, as it applies business principles where for decades we’ve just thrown aid dollars and wondered why corruption and suffering continue.

    How does HOPE compare to Kiva? As I understand it, Kiva’s sole purpose is connecting lenders to third-party loan agencies. Might be an interesting topic for a post! Keep up the good work –

  2. Rafael N. says:

    It’s the summer…no one wants to do math / finance problems Lol.

  3. Kim Bader says:

    I’m impressed by the way you are connecting your coursework with what you’re doing this summer!

  4. Michael Song says:

    Hi JHart,

    HOPE actually partners with KIVA through several of our MFIs as it is a great and cheap way to get funding for clients. As of now, I believe four of our MFI’s are on KIVA and another is being setup. An issue however is the administration needed to upkeep the transparency of KIVA incurred loans and we are trying to find ways to streamline or improve the process for our MFIs. There is much work on the ground level for loan officers or staff in the MFIs to with KIVA. As of now it is fairly efficient, but I think there could be a better way of doing it.


  5. jhart says:

    Cool – thanks for the info!