Social Performance Indicators Blog

Advocating for Financial Performance Indicators: What Can We Learn from Efforts in Social Performance?

Guest Post by:
Drew Tulchin, Managing Partner, Social Enterprise Associates
Leah Nedderman, Consultant

Most advocates of social performance acknowledge that financial performance indicators are more widely recognized than social measurement indicators.  Financial value is considered less subjective and financial metrics are more widely utilized. For example, the CEO of a microfinance institution (MFI) is more likely to track and report return on equity (ROE) than clients’ progress out of poverty. A country’s central bank is more likely to have portfolio at risk (PAR) requirements than client protection requirements in evaluating the success of an institution being regulated.

However, those of us promoting financial performance standards still find considerable challenges when encouraging the revision and adoption of new financial standards, particularly since there is a revision and update to current standards underway.

What can be learned from the work of social performance advocates, particularly in terms of reaching out to stakeholders with targeted and consistent messages?

First, the challenge: The SEEP Network, an international membership association based in Washington, DC, has launched a revision of the SEEP Framework for Reporting, Analysis, and Monitoring—a tool for MFIs and stakeholders to generate comparable and internationally accepted financial information. The Microfinance Industry Reporting Standards Initiative is a formal mechanism to maintain and update the standards.  This is the first time in 6 years an update has taken place. 

New Social Performance Data Collection Has Begun!

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MIX is pleased to announce that it has begun data collection for the FY 2009 Social Performance Reports.

The 2009 Social Performance Report templates are now available on MIX website at: www.themix.org/standards/sp-reports in English, Spanish, and French. The templates in Arabic, Russian and Bahasa Indonesia will be coming soon.

MFIs already registered on MIX Market can submit the completed SP Report via MIX Market until September 30, 2010. For any questions regarding the social performance program, please e-mail MIX’s Social Performance Manager Micol Pistelli at mpistelli@themix.org 

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Happy Earth Day!

Posted by: Taea Calcut

A SABR microfinance client harvests lemons in Uzbekistan

In celebration of Earth Day 2010, we invite our readers to review the Social Performance Indicator Blog's previous Social Responsibility to the Environment posts, which examined the roles MFIs play in mitigating the environmental impact of financed enterprises. Feel free to share environmentally-conscious activities your MFI is doing in honor of the holiday (or year-round) in the comments section below!

A Holistic Approach to Gender Equality: Financial and Nonfinancial Services at SABR, Uzbekistan

Posted by: Katherine Oglietti

SABR clients engaged in a training session

Interview with:
Madina Rakhimova, Executive Director and Saodat Akhmedova, Deputy Director, Socio Economic Development Centre (SABR), Uzbekistan

Socio-Economic Development Centre (SABR), based in Samarkand City, Uzbekistan, is an NGO founded in 1996 to support women survivors of domestic violence and their children. SABR seeks to “work with and for women and children in difficult socio-economic situations, providing support, encouragement, and the opportunity for an independent life in a safe environment.” SABR added a microfinance component to its operations in 2001, and officially became a microfinance institution (MFI) in 2006. The MFI aims to improve the socio-economic conditions of the most vulnerable layers of the population by strengthening their abilities to lead independent lives in a secure environment.

MIX: What led to the decision to include a microfinance component into your programming?

SABR: The results of socio-economic surveys in rural areas of Uzbekistan proved that the roots of gender inequality and violence against women are not found only in the gender stereotypes and traditions prevalent in a given society, but also in women’s economic dependence on their families or husbands. To address this problem, the priority of our programming became involving women from rural areas in entrepreneurial activities. The most appropriate means of supporting the startup of individual businesses is through microlending. At the time in 2001, microlending was the new and developing mechanism to support the low income layers of the population in Uzbekistan.

Non-Financial Services: SP Report Data Findings

Posted by: Taea Calcut

In keeping with our current theme of non-financial services, today’s Social Performance Indicators Blog post examines the services offered by 208 microfinance institutions (MFIs) from 69 countries worldwide, each of which submitted MIX Social Performance reports in 2008. (As explained in previous data posts, we draw readers’ attention to the fact that our current sample size remains too small to draw definitive conclusions. However, we present what information we have in the hopes of encouraging greater numbers of MFIs to submit Social Performance reports as well as to aid the formulation of research agendas in the future.)

Graph 1: Non-Financial Services Offered by MFIs (n=208)

First, we looked at the type and popularity of the services MFIs provide to their clients. As  Graph 1 illustrates above, we found that women’s empowerment services which aim to alleviate social inequalities and constraints faced by women rank among the most popular services and are offered by 98 (47%) of the reporting MFIs. Within this category, MFIs are most likely to offer business (82%) and leadership trainings (59%) to their female clients. The next most popular service offered by MFIs are enterprise services (95 MFIs; 46%), followed by adult education (77 MFIs; 37%) and health services (60 MFIs; 29%).

Incorporating Poverty Assessment Data into MFIs' MIS

Posted by: Taea Calcut

The Social Performance Indicators Blog speaks frequently about the need for microfinance institutions (MFIs) to collect information on the populations they serve to determine if their activities are aligned with their social missions. However, data collection is only a first step. Following its collection, data must be properly stored, organized, and analyzed to ensure its use by MFI staff in decision-making processes.

Last week, Grameen Foundation released a working document, Basic PPI MIS System Requirements, to address the question of how MFIs can incorporate poverty assessment data captured by its Progress out of Poverty Index^TM (PPI^TM) into their management information systems (MIS). The document is meant to serve as a guide for MFIs' IT staff and consultants and Grameen Foundation welcomes comments from MFIs on their experiences to further refine it. 

For more information on the working document, please visit Grameen Foundation’s Progress out of Poverty Blog. For discussions on how MFIs have put the PPI^TM to use in their social performance measurement and management activities, please visit our blog posts on PRISMA in Peru, Fonkoze in Haiti, or our poverty measurement archives.

Enhancing Financial Inclusion: The Role of Non-Financial Services

Posted by: Taea Calcut

Earlier this year, the Social Performance Indicators Blog explored the range of financial products and services offered by microfinance institutions (MFIs) to meet the unique needs and constraints of their clients. However, recent research and industry discussions suggest that the achievement of MFIs' social performance goals may be better met with the additional provision of non-financial services that complement MFIs' core business and help clients best utilize the financial products and services available. To examine this issue further, the blog will present data and innovative approaches to non-financial services including enterprise services, adult education, health services, and women's empowerment using MIX Social Performance reports and interviews with select MFIs over the coming weeks.