Social Performance Indicators Blog

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.

Rural Outreach through Credit Unions: ASC Union, Albania

Posted by: Katherine Oglietti

Interview with: Gentain Cane

Marketing, ASC Union, Albania

ASC Union is a voluntary union of individual Savings and Credit Associations (SCAs), which are village financial institutions that are created and managed by their members and administrated by its member-elected Board of Directors. Each member makes a minimum deposit into the SCA, which constitutes the majority of the financing for loans and represents over a quarter of loan portfolio funding at the Union level. ASC Union supports its SCAs financially and technically, with the aim of promoting productive activities in rural areas. It is the first microfinance provider in Albania, out of a total of 7 microfinance providers registered by MIX in the country. In the following interview, Gentain Cane of ASC Union describes how the union reaches rural clients at competitive interest rates while covering its costs. 

MIX: In the MIX Social Performance Report, ASC Union states that its social mission is "to provide financial services to the clients living mainly in rural areas and practically excluded from the conventional financial institutions." How does ASC Union use its market studies and client satisfaction surveys to design loan and savings products to meet the needs of its low-income clients in rural areas specifically?

Gentian Cane: The services offered and provided by ASC Union are primarily at the micro level. In contrast to commercial banks, microloans are offered to our clients at an interest rate approved by the ASC Board of Directors at the beginning of each year, (currently 11-16% depending on loan type) which is kept at a fixed rate throughout the year. ASC offers the most competitive interest in the rural areas where we work in order to both meet the social component of our mission as well as to mitigate the needs of low-income clients. 

Downscaling Commercial Banks Can Offer High Quality Products to Microfinance Clients

Posted by: Katherine Oglietti

Information for this MFI profile was provided through an interview with Tofig Gasimov, Director of International Relations at Parabank, Azerbaijan; MIX Market; and the Parabank website.

Parabank is one of the oldest commercial banks in Azerbaijan; it was formed in 1991. Though it has been successful as a commercial bank, it is currently scaling down in order to also reach a low-income population that, according to the bank’s social mission, still faces difficulties in accessing financing. It initiated its microfinance component in 2004 with a venture in unsecured loans for cattle breeding in rural villages. The bank now supports businesses in any scale, from micro to large enterprises, and it has made a shift from lending not only to individuals but also through solidarity groups. While Parabank viewed this shift as a risk, the portfolio at risk over 30 days on its microcredit portfolio is actually a percentage point lower than its regular portfolio.

As a commercial bank, Parabank is able to offer a wide range of financial services to its clients in both rural and urban areas such as fixed term and checking accounts, educational loans, and insurance products; the social performance report indicates that it is able to offer more products than its peers. Clients have access to vehicle and real estate insurance through several different insurance companies in Azerbaijan. Last year, Parabank included Credit Life Insurance in their programming in order to protect the unsecured group loans (which are only 3% of the loan portfolio). This covers the full amount of the loan in cases where the client is unable to repay the loan due to serious health conditions or death. Though initiated for the purpose of reducing the risk of overindebtedness for its low-income microloan clients, Credit Life Insurance will soon be applied to all types of loans. Here we see an increased focus on client protection that occurred simultaneously with a shift towards microfinance.

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.

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.