Social Performance Indicators Blog

Non-Financial Services: The Experience of Initiative Development Ghana

Posted by: Katherine Oglietti and Mike Krell

An ID-Ghana client and her wares

Interview with:
Godknows Kporha, Social Mission Manager, Initiative Development Ghana

In response to the rapidly growing population in Ghana’s capital city, fed by a large influx of migrants from rural villages, Initiative Development Ghana (ID-Ghana) caters its financial and non-financial services to deprived areas in Accra. Its approach is to target the poorest urban neighborhoods to build a more inclusive economy. It offers a combination of not only credit but also savings, insurance, and trainings to its "partners" (i.e., clients) with the contention that microcredit is a relevant but incomplete method to effectively respond to the global problem of poverty.

MIX: In ID-Ghana’s Social Performance Report, you report offering adult education training among other non-financial services. Which learning areas do these training sessions cover? How many of your clients participate in these trainings? Have you conducted any assessment as to whether clients have incorporated the skills they learned into their daily lives?

Mr. Kporha: Our trainings fall under two main headings:  business and social.  In our business trainings, we cover topics such as costing and pricing, customer care, business opportunity identification, record keeping, and credit management. Social topics include personal hygiene, national health insurance, domestic violence, and malaria prevention and management. These trainings have been integrated into the methodology for our new group loan product, Onipa Nua, and are compulsory for partners.

We closely monitor training attendance. In March 2010, 3,249 people received training from ID-Ghana, out of a total of 3,991 active borrowers. And while we have not yet performed an impact assessment of this new training regime, anecdotal evidence suggests that these trainings are having a positive outcome on our partners. We feel that these trainings have equipped partners with much-needed skills and knowledge regarding the effective management of loans, among other things, and that this is reflected in greatly increased loan repayment rates.

"Fulfilling the Promise: Managing Social Performance"

Posted by: Taea Calcut

What is social performance management (SPM), why is it important, and how does one implement SPM within microfinance institutions (MFIs)? “Fulfilling the Promise: Managing Social Performance,” a short film created by the Imp-Act Consortium, answers these questions while sharing the stories of two MFIs -- the Small Enterprise Foundation in South Africa and AMK in Cambodia -- committed to strong SPM practices. Responses to the film are welcome in the comments section below.

New Resources for Social Performance Management from the Imp-Act Consortium

Guest Post by:
Veronika Thiel, Microfinance Research Consultant

The primary goal of microfinance has always been to help people out of poverty through the provision of financial services to people who were previously thought to be unbankable. After a period of growth and going from strength to strength, there has been a tendency to focus too much on the financial stability of microfinance institutions (MFIs) rather than on the social impact they are creating. There has been the assumption that a financially-viable organization is automatically creating beneficial social outcomes. Following a series of articles and academic research that highlight serious problems with overindebtedness and the destruction of savings in certain contexts, the microfinance sector is being challenged to revisit their approach to effectively achieve their social mission. Financial viability needs to be seen again for what it is – a means to an end rather than an end in itself. The achievement of social outcomes is not an automatic side effect of having a financially viable organization – social performance management (SPM) needs to take center stage.

In other words, microfinance needs a social performance approach that measures and monitors the social impacts organizations’ work have on the lives of their clients and the communities they operate in. Do organizations help or hinder? Do they reach the clients they seek to reach? Do their products help clients reach their goals? Are MFIs creating a lasting legacy or do they unintentionally destroy existing assets? To find this out, MFIs have to become as attuned to social indicators as they are to financial ones. By mainstreaming social performance management across an organization, they can ensure that they track social – and financial – performance in a meaningful way.

The Imp-Act Consortium, a partnership of nine organizations operating worldwide, has over the past 10 years demonstrated that most MFIs can improve their services with relatively small and affordable changes, and that social performance needs to be integrated into management for social goals to be achieved. Their work has promoted the mainstreaming of SPM into microfinance by providing practical guidance and research on how to do so. The underlying idea of marrying social and financial outcomes to help MFIs fulfil their promise is also reflected in a set of principles for SPM endorsed by the Social Performance Task Force in June 2009. Over 75 MFIs have signed to these principles already.