Banco Adopem Dominican Republic
Classification by the principal vulnerability dimensions of new clients taking out their first loan in 2015, and of total clients who had a loan with the institution at the end of 2015.

Later in the chapter we examine clients in more detail, what they do and how they have performed. The lines presented are in scale with the percentages.
361,722
Total clients
217,992
Credit clients
67,411
New credit clients
1_ According to Dominican Republic's official poverty line (distinguishing between rural and urban environments). Source: Ministry of the Economy, Planning and Development. Clients whose net income (i.e. profit obtained from their micro‐enterprise) divided by the number of members in the family unit (per capita) is no more than 3 times the poverty line of their corresponding country and type of environment (rural/urban).
2 _ Clients with primary education at best, as proportion of all credit clients.
361,722
Total clients
217,992
Credit clients
67,411
New credit clients
Classification by the principal vulnerability dimensions of new clients taking out their first loan in 2015, and of total clients who had a loan with the institution at the end of 2015. Later in the chapter we examine clients in more detail, what they do and how they have performed. The lines presented are in scale with the percentages.
1_ According to Dominican Republic's official poverty line (distinguishing between rural and urban environments). Source: Ministry of the Economy, Planning and Development. Clients whose net income (i.e. profit obtained from their micro‐enterprise) divided by the number of members in the family unit (per capita) is no more than 3 times the poverty line of their corresponding country and type of environment (rural/urban).

2 _ Clients with primary education at best, as proportion of all credit clients.
Measuring
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Our clients and our scale

Banco Adopem retains its focus on serving low-income clients. 90% of its clients are financially vulnerable, the highest proportion in the BBVAMF Group.

Client economic vulnerability 1

1 According to Dominican Republic's official poverty line (distinguishing between rural and urban environments). Source: Ministry of the Economy, Planning and Development. Clients whose net income (i.e. profit obtained from their micro-enterprise) divided by the number of members in the family unit (per capita) is no more than 3 times the poverty line of their corresponding country and type of environment (rural/urban).

Clients by type of product

The very significant increase in the acquisition of new clients has kept the percentage of vulnerable clients above 90%; of all BBVAMF Group institutions, this is the highest proportion

New credit clients 2

2 Takes into account clients that joined during the year (new clients).

Profile of our new credit clients 2
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Women make up more than two thirds of Adopem’s clients. More clients with primary education (at best) have signed up, and the proportion of rural clients and those under 30 years have increased slightly too.


2 Takes into account clients that joined during the year (new clients).

Sales, disbursement & weight of credit installment 2
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The weighting of the credit payment installment (as a % of monthly sales) has fallen in the last few years for new clients, given that the increase in average disbursements has not kept up with sales levels, as reported by clients.

2 Takes into account clients that joined during the year (new clients).
3 Average disbursement, calculated as the average first disbursement for new clients each year.
4Weight of the installment calculated as an average ratio (installment divided by sales) of each client.

Clients’ average monthly net income per capita is USD 160.

Average per capita micro-entrepreneurial net income, by client seniority 5
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The relative stability of per capita monthly net income over time is accounted for by the influx of new clients with higher levels of sales and net income.

5 Data for the current portfolio as of December 31, 2015.

Average per capita micro-entrepreneurial net income, by client vulnerability5 6

Average per capita net income of 54% of clients, classified as vulnerable is USD 5.50 a day; that of the 36% who are poor or extremely poor is, on average, USD 2.20 a day.

The non−vulnerable segment has an average monthly net income of USD 457, less than twice the vulnerability line.

5 Data for the current portfolio as of December 31, 2015.
6 Poverty lines are for the urban environment.

Our clients’ enterprises

Economic activity 7

96% of clients have a business in the tertiary sector (trade and services); nearly 79% are in trade. The distribution remains for both rural and urban areas.

7 Data for the current portfolio as of December 31, 2015.

Average monthly sales by vulnerability 7

7 Data for the current portfolio as of December 31, 2015.

Micro-enterprises’ employee breakdown 7

16% of clients take on at least one employee, and the rate of employment creation is greater in less vulnerable segments.

7 Data for the current portfolio as of December 31, 2015.

Assets, liabilities and equity by vulnerability 8 9

The degree of leveraging remains the same, whatever the category of vulnerability.

8 Assets and equity calculated at the time of credit evaluation (i.e. not including the microcredit granted).
9 Data for the current portfolio as of December 31, 2015.

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Assets and average disbursement by vulnerability 9

9 Data for the current portfolio as of December 31, 2015.

Loan installment, expenses & margins (as % of sales) 10

The financial burden of the loan installment on sales falls as clients become less vulnerable. The average works out at 5%.

The gross margin (net income + installment) over sales is 39% on average for all vulnerability sectors.

10 Calculations based on clients reporting expenditures.

Our clients’ development

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Client economic vulnerability (by cohort) 11 12
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11Shows the situation at the outset and the current situation at the end of December 2015 of clients in each cohort still current as of December 31, 2015.
12 Clients participating in the sample are current clients and have had their data updated in the last 12 months.

Clients overcoming poverty (by cohort) 12
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Since 2011 over 14,000 current clients classed as poor when registering have come off the poverty line.

12 Customers participating in the sample are current customers and updating data received in the last 12 months.

Retention 13

Similar client retention rates in the last 4 cohorts analyzed. Client loss after one year remains, on average, around 27%. Adopem has the best client retention rate of the BBVAMF group after 4 years.

13 Percentage of clients in each cohort still current as of December 31,2015.

The faster growth of net income over sales suggests an efficiency improvement by micro-enterprises during their relationship with Adopem.

Average monthly sales 14
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There is a high and sustained increase in sales, net income and assets of clients’ businesses.

14 Data of current clients as of December 31, 2015, and that have had a data update in the last 12 months. The situation at outset is shown (data in their cohort year) and their situation at the end of December 2015. The outset is the moment that the first loan was granted.

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Average monthly net income (by cohort) (USD) 14
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There is a high and sustained increase in sales, net income and assets in clients' businesses.

14 Data of current clients as of December 31, 2015, and that have had a data update in the last 12 months. The situation at outset is shown (data in their cohort year) and their situation at the end of December 2015. The outset is the moment that the first loan was granted.

Average assets (by cohort) (USD) 14
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14 Data of current clients as of December 31, 2015, and that have had a data update in the last 12 months. Thesituation at outset is shown (data in their cohort year) and their situation at the end of December 2015. The outset is the moment that the first loan was granted.

Average disbursement per transaction (by cohort) 15

Continuous and systematic increase in clients’ average disbursement, nearly doubling over two years.

15 Average disbursement, calculated as the total disbursement made in a year divided by the number of transactions by each client participating in the disbursement in said year.

Job creation (by cohort) 16

After two years, on average 8% of clients create at least one new job position.

16 Proportion of enterprises, of those still current in each cohort, that have increased their payroll.

Average monthly sales by employee 17

Monthly sales per employee are higher among clients the longer they have been with the institution, suggesting an increase in productivity over time.

17 Only clients who have at least one employee on the payroll are included.

Client improvement in healthcare (by cohort) 18

After two years on average, 15% of clients have upgraded their healthcare cover.

18 Proportion of clients still current in each cohort who have moved from not having health insurance to having some, from having public insurance to having a mixed or private one, or from having a mixed insurance to a private one.

Client improvement in housing (by cohort)19

7% of clients have improved their housing conditions after two years.

19 Proportion of clients still current in each cohort who have moved into their own home, made home improvements or increased the number of rooms in their home from when they registered at the outset.

Comparing annual cohort performances confirms the trend of increased savings.

Average savings 20 21

Sustained growth of average savings, for both asset clients (CAGR 11 15 12%) and clients in general (CAGR11-15 16%).

20 Includes the overnight and term savings of current clients each year.
21 Average saving calculated for all clients with a balance of USD 1 or more (in local currency equivalent) on all dates.

Average savings (by cohort) 21 22

21 Average saving calculated for all clients with a balance of USD 1 or more (in local currency equivalent) on all dates.
22 Saving for clients current in each cohort having both credit and savings.

Activity Data

Summary of activity 23
Total

Gross loan portfolio (USD)

111,779,893

Total disbursed in 2015 (USD)

133,861,505

Nº transactions in 2015

210,405

Average disbursement in 2015 (USD)

636

Deposits & other (USD)

51,000,274

Nº Employees

1,238

Nº Offices

70

Clients receiving financial education

16,051

23 Data as of December 31, 2015.