Social Performance Indicators Blog

Not Just Credit: Savings and Insurance Products through CRECER, Bolivia

Posted by: Katherine Oglietti

 A CRECER client in her restaurant

Interview with: Fabiola Céspedes Quiroga
Research Coordinator, CRECER, Bolivia

CRECER began in 1990, following a new management philosophy developed by Freedom from Hunger called Crédito con Educación (Credit with Education). Currently, CRECER facilitates financial services and products integrated with development services to 102,212 clients, of which 90% are women, 64% have only completed primary education, and 38% live in rural areas. As a non-regulated NGO, government policies prevent CRECER from accepting deposits or offering insurance products.  However, the organization has taken creative measures in order to facilitate these services to their clients. While commercial banks such as Parabank in Azerbaijan are downscaling in order to adapt their financial services to microfinance clients, NGOs such as CRECER are searching for ways to increase their institutional capacity in order to offer more financial services to their clients. In this interview, CRECER speaks about the various financial products it offers.

Support Haiti through Microfinance

Posted by: Katherine Oglietti

Following the earthquake in Haiti, we featured guest posts from Sogesol and Fonkoze affiliates because we were able to make rapid contact with them, yet these MFIs are not the only ones who need support. It is necessary to emphasize that each of the microfinance institutions in Haiti and their clients have suffered greatly as a result of this catastrophe, and each will have much rebuilding to do. They have born losses of staff members and damages to their institutions. They are struggling to overcome these heavy blows to their organizations while redoubling their efforts to provide desperately needed loans and financial services to their clients. 

Photos by Leigh Carter, Fonkoze USA

As the rubble is cleared and the dust settles, microfinance will become an essential component of the rebuilding process, helping microentrepreneurs get back on their feet. MFIs have the capacity to offer loans for rebuilding homes and businesses; the ability to offer such financing will be contingent upon a large increase in funding. Please consider channeling your support for Haiti’s continual and sustainable development through one or more of these microfinance institutions who have been working to support Haitian microentrepreneurs and families for many years. 

MIX Market has information on six microfinance institutions from Haiti. Please find below the information that we could find on each of these organizations, as well as how to contribute to their funds for relief efforts.

Worse than a War Zone: Sogesol Assesses the Damage in Haiti

Guest post by: Melissa Lumpkin, ACCION International

 

Melissa Lumpkin is a member of ACCION’s Africa & Haiti Global Programs team.  Based in Washington DC, she is the project manager and board representative for ACCION’s partner in Haiti, Sogesol.  She can be reached at mlumpkin@accion.org.

Anyone who has experience living, traveling or working in Haiti will tell you that life for most Haitians is tough – and this on a good day.  The impact of last week’s earthquake has been catastrophic and the country will face immense challenges in rebuilding.

For the past decade, ACCION has worked with Sogesol, the microfinance arm of Haiti’s largest bank, to bring microfinance services and hope for a better future to Haiti’s self-employed poor. Over the past week, we’ve remained in close communication with the President and Directeur Général of Sogesol. The DG confirmed that she, along with several staff and ACCION’s resident advisor, were at the Sogesol headquarters in Petion-Ville when the earthquake hit. Fortunately, they were able to get out of the building and safely home. Yet, a disaster of this magnitude leaves no one untouched – all have lost many close friends and witnessed widespread destruction. Our own resident advisor wrote, “Melissa, the conditions here in Haiti are unimaginable. Please… whatever ACCION can do to help.  It is worse than a war zone.”   

Promoting Environmentally Sustainable Enterprises among Indigenous Populations: REFICOM-CDRO

Posted by: Katherine Oglietti

 
A CDRO client plants a tree as part of a reforestation project.
 

Interview with: Mirna Elizabeth Chaclán
Marketing and Social Performance, REFICOM-CDRO, Guatemala

CDRO was founded in 1981 by leaders of Mayan communities in Western Guatemala in order to promote integrated rural development in indigenous communities through an approach that respects Mayan Quiche traditions. CDRO works in conjunction with REFICOM (Red Financiera Comunitaria- The Community Financial Network). Due to its goal of assisting indigenous populations who are closely attached to the land, social responsibility to the environment is essential to CDRO’s programming. MIX interviewed Mirna Elizabeth Chaclán of REFICOM-CDRO, who gave us an overview of their written and informal policies on social responsibility to the environment.

REFICOM-CDRO created a written policy on environmental protection in 2008, promoting social responsibility to the environment among the enterprises it supports. Mirna explains: “We live in an important environmental zone, so we feel it is important to conserve the environment. We feel it is very important to establish an environmental policy to value the resources that we have, and secondly to have principles and norms that allow us to practice microfinance without affecting our environment.” The first way it works towards this goal is through classifying microenterprises according to their potential environmental impact in three tiers: high, medium, and low impact.

MFIs Respond to Disaster: Fonkoze in Haiti

Posted by: Leah Nedderman

Leah Nedderman is a microfinance consultant based in Washington, DC and former Director of Social Performance Management for Fonkoze.  She can be reached at Lnedderm@gmail.com.

As a former Fonkoze employee and resident of Port-au-Prince, I have a sense for the catastrophe that has occurred, and the challenges that lie ahead for Fonkoze and other institutions who serve the poor of Haiti. 

This afternoon, I spoke with Fonkoze employee Natalie Domond, where she called from a friend’s home in Port-au-Prince. She and the other Fonkoze staff safely exited the central office in Port-au-Prince on Tuesday. Outside, dust and screams filled the air. She recounted gruesome scenes at every turn.

Institutions like Fonkoze, who exist to provide services to the poor, will require support now more than ever.  Just fifteen months ago, Haiti was hit by several powerful tropical storms and a hurricane. Fonkoze responded by mobilizing leaders in forty communities throughout the country to assess the damage, account for members, and generate information for relief agencies. Almost immediately, Fonkoze was able to offer new financial products to affected families so that they could get their micro-businesses up and running again, re-stock their goods, and begin recovering their livelihoods. I am confident their response to the current crisis will be just as resolute.

The name Fonkoze stands for “Shoulder to Shoulder Foundation” in Haitian Creole. It reflects the commitment of the institution and its staff to standing in solidarity with the Haitian poor. This commitment comes from loan officers who work with rural women to establish small businesses in a despondent economy, in the dogged determination of literacy trainers who travel sweaty miles to hold classes for illiterate members, and in the steely resolve of the members who toil year after year to provide food and schooling for their children.

Today, Natalie remarked that this incredible event is a defining moment for the international community. She believes that with assistance, Fonkoze will recover, and will be a leader in the recuperation of the country. 

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You can help Fonkoze by making a donation to the Fonkoze USA “Earthquake Relief and Rehabilitation Fund” today. To follow Fonkoze earthquake news and updates click here.

Innovatives approaches to the socio-economic development of communities: Fundación Paraguaya

Posted by: Micol Pistelli

 

Interview with: Martin Burt, Executive Director of Fundación Paraguaya

Founded in 1985, Fundación Paraguaya (FP) is a leading social enterprise that develops innovative solutions to poverty and unemployment in Paraguay and proactively disseminates them around the world. All FP programs promote economic self-reliance through entrepreneurship, and in keeping with this philosophy, FP itself is financially self-sustaining.  In this interview with MIX, the Executive Director of FP, Martin Burt, tells us about his institution’s approach of fighting against poverty in Paraguay by using microcredit and social capital formation as tools for development.

MIX: Mr. Burt, Fundación Paraguaya has developed a multidimensional approach that aims at promoting economic self-reliance through entrepreneurship. Can you give us an overview of these strategies?

Mr. Burt: Fundación Paraguaya runs four programs:

i. a microcredit program which began in 1985, which has 20 offices and serves over 37,000 clients in urban and rural areas throughout Paraguay 

ii. an economic and financial education program (Junior Achievement) which has trained over 150,000 youth since 1995 and, since 2005, 20,000 low-income women

PPI Shows Fonkoze that Clients Are Moving Out of Poverty

Posted by Preeti Wali, Communications Associate, Grameen Foundation

A few weeks ago, we introduced the Progress out of Poverty Index™ as a way for microfinance institutions to monitor whether they are helping their clients move out of poverty. We conducted an interview with Grameen Foundation and Prisma Peru, who discussed how they are implementing the PPI™. Here, Preeti Wali describes how they are using the PPI™ in Fonkoze in Haiti and adjusting strategies to better serve the poor.

Haiti is the poorest country in the Western Hemisphere. For Fonkoze, the largest microfinance institution (MFI) in Haiti, the mission was clear: target the poor and ultra-poor, mainly women in rural areas, and provide services to meet their special needs. In 2006, Fonkoze—working with Grameen Foundation--introduced the Progress out of Poverty Index™ (PPI™) assessment tool to measure the poverty level of its clients and to track their progress.

“When Grameen Foundation approached me about forming a partnership, the prospect of developing a PPI for Haiti was one of the most exciting elements,” says Fonkoze Director Anne Hastings.  “We want numbers behind the promises we make to the poor.”

Just two years later, the results are positive: data collected in 2008 showed that Fonkoze was meeting its goal to target the poorest, and that its programs were showing results.  Clients who had been with Fonkoze for at least two years saw movement out of poverty; seven percent moved above the $1 a day poverty line from 2006 to 2008, and nine percent moved above the $2 a day line. This movement occurred despite Haiti’s extreme poverty, which was compounded by the devastation of three hurricanes and a tropical storm that threatened or destroyed the livelihoods of approximately 14,000 Fonkoze clients.  

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.