Some thrive of the rush of closing a sale, others live for the thrill of helping someone learn a new skill or discover a new truth. Me? I get fired up about efficiency. Conversely, inefficiency irks me.
There HAS to be a better way...
That’s why I was excited to start reading my technical guide for the microfinance product costing tool I’ll be implementing for HOPE/Esperanza in the DR.
The tool was developed by CGAP (Consultative Group to Assist the Poor), an independent policy and research center dedicated to advancing financial access for the world’s poor. Here’s what they say about the tool:
CGAP developed and field tested this activity-based costing tool to help MFI managers understand and analyze individual product costs, especially administrative/organizational costs. Once a product’s costs are determined, the tool suggests methods for understanding why and how the costs were incurred and how the product contributes (or not) to the overall financial viability of the MFI. Activity-based costing, the preferred method outlined in this tool, traces indirect costs in microfinance to core operational activities. It is a potent tool for identifying opportunities to improve business process effectiveness and efficiency.
So here’s the theory behind what I’ll be doing in the DR: measure cost >> understand profitability >> identify improvement areas >> become more efficient >> alleviate poverty using fewer dollars. BAM!
Can’t wait to finish the 100+ pages!
