Social Performance Indicators Blog

How Transparency in Disclosure of SP Indicators will Positively Impact Clients

Posted by Micol Pistelli

One of the questions raised in the panel: “Taking stock of microfinance: Does it really help the poor?” held last week at Columbia University was to what extent increased transparency in disclosure of SPTF/MIX social performance indicators will positively impact clients.

The SPTF/MIX social performance indicators, if properly tracked and integrated into an MFI’s operations, can certainly help the institution better meet clients’ needs. The disclosure of such information on a public platform such as MIX Market aims to improve transparency of information and data analysis in the industry, with the ultimate goal of improving allocation of funds towards truly socially-oriented MFIs that best serve the world’s poor.

The purpose of measuring social performance over time is so that MFIs can make internal changes in order to meet client needs. MFIs that have begun to track social performance information such as client retention, poverty level of clients, and clients’ over-indebtedness, and have then used this information to adjust their internal policies and strategies, have already experienced positive changes in their program’s outcomes. Some of these stories have been documented in the SPM Practice Guide, Putting the Social into Performance Management.

Taking Stock of Microfinance: Does it really help the poor?

Posted by: Micol Pistelli

Jonathan Morduch, Janiece Greene, Richard Rosenberg and Micol Pistelli

On November 19, I was invited by the Microfinance Working Group at Columbia University to participate in a panel entitled “Taking stock of microfinance: Does it really help the poor?” This panel was valuable not only for its relevance to current discussions in the microfinance industry but also because it is rare to see academics, practitioners, donors, and supporting agencies sit around a table to share views on such a highly debated topic.

I had the pleasure to share the stage with Richard Rosenberg, Senior Advisor to CGAP; Jonathan Morduch, Professor of Public Policy and Economics at New York University; and Janiece Greene,   Director of the Women’s Market at Women’s World Banking (WWB). The panel was moderated by Louise Moretto, Vice President at Deutsche Bank, Community Development Group.

The aim of the panel was to discuss findings of recent impact evaluations and implications; over-indebtedness and exploitative interest rates that have put microfinance’s use as a development tool under scrutiny; innovative approaches that may improve the effectiveness of microfinance institutions; and the extent to which increased transparency in disclosure of social performance indicators will positively impact clients.

Integrating Social Performance in Operations: the Case of the Small Enterprise Foundation (SEF) in South Africa

Posted by: Taea Calcut

A SEF client at work

Interview with:

Anton Simanowitz, Chief Development Officer at the Small Enterprise Foundation (SEF) and Director of the Imp-Act Consortium at the Institute of Development Studies

The Small Enterprise Foundation (SEF) was established in 1992 in Limpopo, South Africa's most impoverished province, with the goal of "working towards the eradication of poverty by creating a supportive environment where credit and savings services foster sustainable income generation, job creation, and social empowerment." In this interview with MIX, Anton Simanowitz, Chief Development Officer at SEF, discusses some of the ways in which social performance measurement and management remains closely integrated with SEF's operations in order to fulfill its goal.

MIX:  Clients for SEF’s Tshomisano Credit Program are chosen after a three-day process of participatory wealth ranking in the village to target the bottom 40%. Could you describe this process in greater detail and explain how it relates to SEF’s mission?

Mr. Simanowitz:  SEF was set up as a poverty alleviation program. To achieve this end, we selected one of the poorest areas in the country as our operational area. We also designed a credit methodology that offered small loans through group-based lending, following the theory that small loans and high transaction costs (e.g., the time spent to enter the program and attend meetings) would deter all but the very poorest from joining.

However, an evaluation in 1995 concluded that only 30-40% of people reached by SEF lived below the poverty line. This was in part a result of the participation of better-off clients who joined the small-loan program due to a need for credit and anticipating larger future loans, and who either actively pushed out people who had different priorities or created an environment where the poor left through self-selection, perceiving the program to be for “someone else.”

Measuring Poverty in Peru: the Experience of PRISMA with the PPI™

Posted by: Micol Pistelli

 

PPI training of trainers session in Peru

Interview with:

Diego Fernandez Concha, Director, Microfinanzas PRISMA Peru

Jeff Toohig, Deputy Director of PPI Deployment, Grameen Foundation

When Dr. Diego Fernandez Concha founded Microfinanzas PRISMA in 1994, his goal was to fight poverty and chronic malnutrition in his country. Fifteen years later, despite recent economic growth, Peru still faces high levels of poverty. According to a nationally representative income and expenditure survey carried out by Encuesta Nacional de Hogares (ENAHO) in 2007, 39.3% of the population in the country lives below the national poverty line and 13.7% lives below half the national poverty line. For a microfinance institution (MFI) like PRISMA that is deeply committed to serving the poorest segment of the population, tracking clients’ poverty levels is a fundamental step toward ensuring that the institution is fulfilling its mission. But how can an MFI track poverty data in an easy and cost-effective way?

When Grameen Foundation developed its Progress out of Poverty Index™ (PPI™) for Peru in 2007, PRISMA was among the first MFIs trained in its use. In an interview with the Microfinance Information eXchange (MIX), Dr. Fernandez Concha and Jeff Toohig, Deputy Director of PPI Deployment at Grameen Foundation, share their experiences with developing and implementing the PPI.