Test Case: Postscript - TSKI Crisis

This case study describes how TSKI recovered from the fraud crisis of 1997.

The spokesperson for TSKI said that the organization had grown too rapidly. After the discovery of the fraud, they realized that total outreach included ghost clients and centers. As the process of recovery began:

• TSKI reported a collection rate of 95.8 percent in 31 December, 1998 and wrote off bad debts for the year;
• Those who rejoined TSKI thereafter paid their debts, and their payments were booked as other income;
• Number of members in the southern branch increased, and collection rate improved by 88 percent in 2000;
• Revival of centers took six years;
• By 2004, the Miag-ao branch where the fraud had taken place, recovered and became the biggest branch;
• For almost two years thereafter, the Miag-ao branch had a 100 percent collection rate;
• TSKI made changes in its microfinance program, its management information systems, human resources and internal control.

TSKI went through rapid expansion from 2001 to 2004. It targeted an average of 50,000 new clients per year from 2002 onwards, to be able to attain its client goal of 250,000 by 2006.