Golden Horse Microfinance On the Brink of Bankruptcy

by: Francis Cimene

Publication Date: December 12, 2014
Length: 4 pages
Product ID#: 1-001-200

Core Disciplines: No core disciplines for this product

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Teaching Note

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Conrad Vergara, the CEO of Golden Horse Microfinance (GHMI), just received the company’s financial reports for the past five months, and he is surprised at what he sees — the bank’s number of non-performing loans has increased from 75 to 150 out of 500 on the books. In the meantime, the company is in the midst of a capital raising campaign and its board will convene next week. Vergara will have to explain the company’s lackluster financial performance to shareholders. The bank wants these shareholders to invest more, but Vergara is questioning whether they will pull their funds and seek out more profitable ventures. Students are asked to examine the company’s problems, prospects, and strategic options as well as apply lessons learned to other business situations.

Teaching Objectives

After reading and discussing the material, students should:

  • Examine and describe the operations and financial management of GHMI.
  • Analyze the company’s problems and prospects.
  • Evaluate the company’s strategic options.