Social Performance Indicators Blog

Working with MFIs: 3 Network Agendas for Social Performance

Posted by: Micol Pistelli

A microfinance client of SKS, an MFI in the MicroFinance Network

Following posts on Tuesday and Wednesday by guest contributors Tomas Rodriguez (REDCAMIF) and Jack Burga (CRS-Project MISION), we asked two regional networks, Sanabel and MFC, as well as the international network MFN to share their social performance agendas. Here is a summary of their key points.

Nadine El Leissy, Project Coordinator at Sanabel: The Microfinance Network for Arab Countries (Sanabel) has been involved in social performance management (SPM) advocacy since 2007, when it launched its first SPM project in cooperation with MFC and funded by Oxfam Novib. The project’s key milestones included training and certifying Arab trainers and senior representatives on the SPM course, training and certifying Arab trainers on conducting social audits, and completing 10 social audits for member MFIs. A 'lessons learned' report summarizing the project’s key findings is available on the Sanabel website.

Sanabel recently launched the second phase of its SPM project, which is intended as a continuation of the first phase and will be directed specifically towards action planning and streamlining of SPM principles within the operations of capable and interested Sanabel members, as well as developing, testing, and disseminating useful SPM tools.

Project MISION II: Helping Latin American and African MFIs Build up their Social Performance Management Systems

Posted by: Jack Burga, Director, Project MISION II, Catholic Relief Services 

(To read the original article in Spanish, click here.)

Established at the end of 2007, Project MISION is the result of an alliance between Catholic Relief Services (CRS) and two national networks, COPEME in Peru and ASOMIF in Nicaragua, with the support of the Ford Foundation. Its goal is to support microfinance institutions (MFIs) to build up their social performance management (SPM) systems, to be best positioned to reach the extremely poor, very poor, and other clients excluded from financial services.

In the first phase of the project, new tools were created and adapted to support a total of 8 MFIs. The project was piloted with different types of institutions – regulated as well as non-regulated— in rural, periurban, and urban areas. In two years time, the project successfully proved that it is possible to create SPM systems for MFIs without compromising their financial performance. On the contrary, improving their SPM systems helped the MFIs achieve a better definition of their target market and products and to therefore reach more effective and efficient financial results.

Social Performance Management: A Response to Three Worries in Microfinance

 

Posted by: Tomás Rodríguez Alas, 

Coordinator of  Program MISION of Red Centroamericana de Microfinanzas (REDCAMIF)

(To read the original article in Spanish, click here).

Three current events are occupying much of the attention of microfinance institutions and networks in Central America:

• the attempts by governments to regulate microfinance activities

• the decrease in resources from many investors owing to the financial crisis

• problems with client debt repayment owing to this crisis

Microfinance Regulation

Microfinance institutions and their networks are not necessarily against the creation of regulations in the microfinance sector. Such regulations could in fact render more transparent transactions as well as provide for more security in client operations within the microfinance institutions. The point of conflict, in most countries, is the parameters with which microfinance operations are regulated, where such parameters adhere to the prudential norms that are applied to traditional banks.

Microfinance institutions ask that regulations be applied to the reality of the market segments where they serve. They appeal to the social nature of microfinance’s origins, in which the target population is comprised of social sectors that traditional banks do not serve: those living in poverty, women, rural inhabitants, and micro and small business owners. Moreover, they argue that microfinance contributes to the reduction of poverty and to the economic development of the sectors that microfinance serves. But while these arguments accurately demonstrate the distinguishing factors of between MFIs and traditional banks, few MFIs can back up these arguments with solid statistics, not going beyond anecdotes and isolated case studies. How many poor people have been reached? How many clients have moved out of poverty? How can we demonstrate this?

Good Reporting Practices: The Role of Networks

Posted by: Micol Pistelli

MFIs affiliated with the ACCION Latin America Network received the 2009 Social Performance Reporting Award for achieving a 100% report rate on social performance.

Experience has shown that the microfinance institutions (MFIs) most likely to report on social performance are those affiliated with networks active in promoting social performance management and standards.  ACCION Network for Latin America leads the pack with 100% of its affiliates reporting to MIX.  At the country level, Asociación Nicaragüense de Instituciones de Microfinanza (ASOMIF; part of Red Centroamericana de Microfinanza [REDCAMIF]) has achieved the best results – with over half its affiliates providing on social performance data to MIX, Nicaragua now ranks as the top reporting country! Microfinance Center (MFC) and Sanabel have made remarkable efforts as well, having respectively translated the MIX social performance report into Russian and Arabic and promoted reporting among their affiliates. As a result, MIX has received 42 reports from the Eastern Europe and Central Asia region and 20 reports from Middle East and North Africa region.  Finally, Red Argentina de Instituciones de Microcredito (RADIM) and Microfinance Network (MFN) have also achieved good outreach, with over half their affiliates submitting data on social performance.

This week, the Social Performance Indicators Blog will focus on the role of networks and their vision and efforts towards disseminating information about social performance and promoting transparency among their affiliates. Stay tuned for a related guest post by Tomás Rodríguez Alas, MISION Program Coordinator for REDCAMIF.

Lanzamiento del Blog en Español - Spanish Blog Launch

Publicado por: Katherine Oglietti

¡La versión en español del Social Performance Indicators Blog se lanzó hoy! Se llama <El Blog de Indicadores de Desempeño Social: Midiendo la promesa de las microfinanzas.> Ustedes pueden ingresarse al sito con un enlace de la página principal, o pueden escribir la dirección electrónica: http://www.espanol.spblog.org/

Sus comentarios siempre estarán bienvenidos.

***

Posted by: Katherine Oglietti

The Spanish version of this blog launched today! Our Spanish readers can see a frequently updated version of the Social Performance Indicators Blog, called “Blog de Indicadores de Desempeño Social: Midiendo la promesa de las microfinanzas.” You can link to the Spanish site from the main blog, or type in the URL directly: http://www.espanol.spblog.org/

Please feel free to post your comments on the Spanish blog!

What Do the Social Performance Reports Tell Us About Poverty Measurement?

Posted by: Micol Pistelli

Of the over 200 MFIs that have completed the social performance report to date, about half report having measured new clients’ poverty levels.  The most common poverty measures used by these MFIs are per capita household income and per capita household expenditures. 22 MFIs report having piloted or used the PPI and 15 provided their results.  Links to their reports can be found below:   

• Adventist Development and Relief Agency International (ADRA) – Peru
• Alternativa Solidaria Chiapas (ALSOL) – Mexico
• Association Microfinance Oued Srou (AMOS) – Morocco
• Alalay Sa Kaunlaran, Inc. (ASKI) – Philippines
• Bhartiya Samruddhi Finance Limited (BASIX) – India
• Community Economic Ventures, Inc. (CEVI) – Philippines
• ESAF Microfinance and Investments (P) Ltd (ESAF) – India
• Fondo de Desarrollo Regional (FONDESURCO) – Peru
• Fondasyon Kole Zepòl (FONKOZE) – Haiti
• Movimiento Manuela Ramos (MANUELA RAMOS) – Peru
• Asociación Fondo Nicaraguense para el Desarrollo Comunitario (PRESTANIC) – Nicaragua
• Asociación Benefica Prisma (PRISMA) – Peru
• Programas para la Mujer - Bolivia (PRO MUJER—BOL) – Bolivia
• Small Enterprise Foundation (South Africa) (SEF) – South Africa
• Sonata Finance Private Ltd (SONATA) – India

A Call for Comments: What Do You Think?

Posted by: Taea Calcut

As we mentioned in our welcome post, it is our hope that this blog becomes a vibrant forum for those interested in social performance in microfinance.  Whether you're a practitioner, donor, investor, academic, or researcher, we'd like to hear from you -- and thanks to the magic of website traffic charts, we know you're out there!  Popular issues brought to light in the comments section will be featured in Friday posts to keep the discussion flowing.

So, be sure to leave comments and let us know what you think.  For those of you with even more to share, please consider being a guest contributor to this blog.  Contact us with your ideas at spblog@themix.org.

Investors are Looking for MFIs to Report on Social Performance

Posted by: Micol Pistelli

 

This week on MicroCapital, Richard Weingarten, Managing Director of the Norwegian Microfinance Initiative (NMI), talks about the importance of social performance measurement: 

“We are also trying to help the industry consolidate around the social performance reporting structure that has been developed by the Social Performance Task Force. We would like to get everyone to report to the MIX Market, and we are trying to be very rigorous with our microfinance investment vehicles (MIV) managers to be sure that all the MFIs in which they invest report on social performance to the MIX.”

A full transcript of the interview can be found here.

So, Who Has Reported From Peru So Far?

Posted by: Micol Pistelli

• To date, 7 Peruvian MFIs have reported their social performance data to MIX: ADRA, FINCA Peru, Fondesurco, MiBanco, Movimiento Manuela Ramos, PRISMA, and Pro Mujer Peru.

• All of the MFIs have a social performance rating. (Click on the "Social Rating" link for each institution.)

• Most of the MFIs have poverty measurement data. ADRA, Fondesurco, Manuela Ramos, and PRISMA have piloted or implemented the PPI, while FINCA has used its own Client Assessment Tool (FCAT).

A PRISMA Peru microfinance client at work

Measuring Poverty in Peru: the Experience of PRISMA with the PPI™

Posted by: Micol Pistelli

 

PPI training of trainers session in Peru

Interview with:

Diego Fernandez Concha, Director, Microfinanzas PRISMA Peru

Jeff Toohig, Deputy Director of PPI Deployment, Grameen Foundation

When Dr. Diego Fernandez Concha founded Microfinanzas PRISMA in 1994, his goal was to fight poverty and chronic malnutrition in his country. Fifteen years later, despite recent economic growth, Peru still faces high levels of poverty. According to a nationally representative income and expenditure survey carried out by Encuesta Nacional de Hogares (ENAHO) in 2007, 39.3% of the population in the country lives below the national poverty line and 13.7% lives below half the national poverty line. For a microfinance institution (MFI) like PRISMA that is deeply committed to serving the poorest segment of the population, tracking clients’ poverty levels is a fundamental step toward ensuring that the institution is fulfilling its mission. But how can an MFI track poverty data in an easy and cost-effective way?

When Grameen Foundation developed its Progress out of Poverty Index™ (PPI™) for Peru in 2007, PRISMA was among the first MFIs trained in its use. In an interview with the Microfinance Information eXchange (MIX), Dr. Fernandez Concha and Jeff Toohig, Deputy Director of PPI Deployment at Grameen Foundation, share their experiences with developing and implementing the PPI.