Average Tenor of Loans Outstanding
H-32
DEFINITION:
Average (simple mean) initial tenor (in months) of all outstanding loans in the eligible portfolio at the time of measurement. This indicator provides specificity around length and nature of portfolio.
GUIDANCE:
The indicator measures the length of the average tenor of the underlying portfolio.
Note:
- This is a parent indicator. It can be disaggregated and specified in various ways given the DFI/practitioner’s approach, project objective, or country context, for example by ownership/leadership (sex, age etc.), size of the companies (e.g. micro, small, medium), sectors, geography (e.g. rural/urban), age or growth of company (young firms, gazelles, etc.), innovation, etc.
- For simplicity and to reduce the reporting burden this is computed as the simple average of the underlying eligible portfolio (i.e. sum of all tenors divided by the number of loans). Alternative metrics exist such as weighted average by subclass (size etc.) or weighted by loans value (i.e. average tenor per currency unit). This distinction may be especially relevant when considering various disaggregation of the indicator (e.g. if reported by size class the average of the average may differ if not weighted by the scope of the size class, and appear inconsistent in reporting).
- This indicator applies to intermediated financing though commercial banks, microfinance institution, a non-bank financial intermediary, or other financial institutions. Refer to metrics under “Private Equity and Investment Funds” for those types of intermediated financing.
Applicability: intermediated finance, not Fund investment.
Related indicators: This indicator should apply to the same scope as the number and the value of loans outstanding.
Unit: # Months