Social Performance Indicators Blog

Announcement: Fill MIX’s Social Performance Standards Report through CERISE’s Social Audit Tool

 

 

 

Translated and posted by: Mike Krell

MFIs using CERISE's SPI social audit tool can now provide their core social performance data to MIX without any additional effort. In fact, the SPI questionnaire contains all of MIX’s core indicators. By using the CERISE/SPI method of evaluation—a method recognized and valued by numerous investors, funders, and regulators—MFIs can not only conduct an internal diagnostic and commit themselves to improving social performance, but can also export all of their social data to the MIX format in a single click with the electronic SPI. This new functionality allows microfinance service providers to improve their transparency as well as their visibility at the international level (MIX/SPS).

From Access to Empowerment: Gender Performance in Microfinance

Posted by: Janiece Greene, Director, Women’s Market, Women's World Banking and Rebecca Ruf, Associate, Capital Markets Group, Women's World Banking

A Women's World Banking client at her shop

Microfinance is best known around the world as a powerful mechanism for low-income women entrepreneurs to lift themselves and their families out of poverty. When women earn, everyone benefits—women focus on improving the lives of their children and families; women repay their loans; women tend to be more loyal customers and to take on greater financial responsibilities of the household. As a result of these dynamics, a majority of MFIs have women as their primary customer base and use “outreach to women” (i.e., percentage of women borrowers) as a proxy for the level of poverty alleviation. However, this indicator only tells part of the story. How well are these women being served? Is simply providing women with access to financial products and services enough to help microfinance organizations meet their double bottom line objectives?

Enhancing Social Performance Transparency to Consolidate Microfinance’s Impact: a Work in Progress in Africa

Posted by: Florent Bedecarrats, Comité d’Echanges de Réflexion et d’Information sur les Systèmes d’Epargne-crédit (CERISE)

For many microfinance institutions (MFIs) in Africa, the CERISE SPI social audit tool is a simple entry point to social performance management.  The SPI tool is fully compatible with the Social Performance Standards, enabling MFIs to easily report to MIX, and it also includes the Consumer Protection Principles, helping MFIs take measures to address weaknesses. Most importantly, while reviewing their practices against their objectives with the SPI tool, MFIs can align and improve their processes for greater resiliency and impact by knowing their clients better, maintaining relationships of trust and proximity, avoiding over-indebtedness, and improving their reputation.

Example of SPI results by dimension and criteria (click on image for enlarged version)

With help from the SPI tool, social audit initiatives are reaching across Africa. For example, in 2008 the West African Confédération des Institutions Financières (CIF) launched a process to improve its social performance. A network of 6 MFIs representing more than 2 million members, including FECECAM (Benin), FUCEC (Togo), PAMECAS (Senegal), RCPB (Burkina Faso), Kafo Jiginew, and Nyèsigiso (Mali), CIF examined the practices of its affiliates through social audits, discussions with staff and elected officials, and feedback on social performance findings from general assemblies. After a year of these efforts, mainly sustained by CIF’s own resources, CIF recently released seven social reports (one for each member and one for CIF as a whole), a short list of key social performance indicators for management monitoring, and an action plan for upcoming years to increase rural access, improve outreach to excluded populations, include more women, and strengthen member capacities.

In Benin, similar progress has been made towards standardized reporting of social and financial performance. This year, the Beninese apex Consortium Alafia reiterated its 2008 experience evaluating the social performance of its 23 member institutions. With help from local networks (Pamiga, MAIN) and support organizations (Entrepreneurs du Monde, Aquadev, Trias), more than 60 MFIs from most African counties implemented social audits. CERISE’s collection of these results has resulted in a very interesting regional peer group analysis, which will be discussed in a forthcoming issue of the Microbanking Bulletin.

As demonstrated in the examples above as well as other initiatives from Senegal to Ethiopia to South Africa, this movement shows that there is a real demand for social performance in Africa to strengthen microfinance's impact for both clients and MFIs.

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.