Improving Profitability and Operational Efficiency for Farm Credit Armenia

This assignment envisaged a dedicated technical support for Farm Credit Armenia (FCA), a medium-sized rural credit cooperative in Armenia, in the area of financial performance with focus on operational efficiency. Finance in Motion has contracted the ADG-AFC consortium to carry out this assignment.

The main objective of the project was to address the Company’s low profitability and operational efficiency and thus contribute to increasing its productivity and financial sustainability. More specifically, the project was to cover two key areas:

  1. Profitability, including, but not limited to loan pricing and ways to adopt a more risk-based approach and
  2. Operational efficiency with core focus on cost savings and control as well as staff productivity.

The activities were to be supported by extensive on-the-job coaching to ensure an effective and continued transfer of knowledge and skills and that all recommendations, practices and tools are properly implemented and efficiently used.


In order to implement this project effectively the services were divided into three phases:
Phase 1: Data Collection and Analysis

  1. Developed a “rapid appraisal tool” in order to a) collect and b) analyse relevant data. The analysis revealed first strengths, weaknesses, opportunities and threats.
  2. Developed interview plan for all relevant fields of operational profitability and efficiency.
  3. Conducted structured interviews to “deep dive” and further analyse from cost and from efficiency perspective e.g. on: Products and Services, Delivery Channels, Client Turnover, Branch Network Structure, Service/Processing Time etc.
  4. Conducted structured interviews to “deep dive” and further analyse e.g.: Qualification/competency level on all levels/of all functional groups (board of directors, branch managers, loan officers  ...), Number of employees, Staff turnover, Credit staff as % of staff, HR-department staff as % of staff etc.

Phase 2: Recommendations and action plan
Based on the findings from the analysis of documents and from the interviews recommendations were developed

  1. for improvement of the profitability and operational efficiency in the respective areas.
  2. to respond to the identified demand for on-the-job-coaching and performance oriented training of staff working in those fields that leave room for improvement and will be responsible for an effective implementation.
  3. for short-term activities for implementation during the project period as well as medium-term and long-term activities to be implemented after the project period were covered by the action plan.

Phase 3: Support for change management and human resource development

  1. Based on the short-term activities in the action plan support to implementation of measures for improvement of profitability and operational efficiency as well as human resource development in the respective areas were provided.
  2. This support was provided using the following: group coaching; individual on the job coaching; performance oriented and leadership training for the management; performance oriented training for staff members; elaboration of improved concepts and procedures.
  3. Measures were implemented to ensure the findings and developed materials as well as the coaching efforts will have a sustainable effect even after termination of the project.