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.

Announcement: PPI™ Initiative in Africa

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The Grameen Foundation made an announcement today that it will begin an initiative with three MFIs in Sub-Saharan Africa to use the PPI™ (Progress out of Poverty Index™) to assess client poverty levels, better target poor clients, and track how they are moving out of poverty. The initiative, the first of its kind in Africa, is being facilitated by the PPI™ Users Collaborative in Africa (PUCA), a new, multi-stakeholder group that unites five charter partners—Oikocredit, Catholic Relief Services, Terrafina Microfinance, Planet Rating and Grameen Foundation—with the national microfinance networks APIM/Mali and  APSFD Senegal. As Sub-Saharan Africa is the poorest region in the world, it is particularly important for MFIs of that region to measure whether and how MFIs are able to contribute to poverty alleviation, improving their strategies accordingly.

More information on this initiative is available on the Progress out of Poverty Blog and the Grameen Foundation webpage.

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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.

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.”

Regional Focus: Social Performance in African MFIs

Posted by: Micol Pistelli

This week we discuss sub-Saharan Africa’s outreach on social performance reporting and management. Several initiatives are currently in place to move the social performance agenda forward in the region. Last week, for example, we heard from Jack Burga about Project Mision II’s work, which includes activities in Senegal led by Latin American consultants.  Similarly, the Association of Microfinance Institutions of Kenya, a body composed of 36 member institutions serving more than 2,000,000 families across the country, organized a three-day workshop on social performance measurement and management in microfinance last month in partnership with the Ford Foundation.  Nearly a dozen African MFIs have also submitted social performance reports to MIX, including:

• Buusaa Gonofaa – Ethiopia
• Microloan Foundation Malawi (MLF Malawi) – Malawi
• Small Enterprise Foundation (SEF)  – South Africa
• Union des Clubs d'Epargne et de Crédit du Mayo-Kebbi (UCEC /MK)  – Chad
• Business Initiative and Management Assistance Services (BIMAS) – Kenya
• Initiative Development Ghana (ID-Ghana)  – Ghana
• Lift Above Poverty Organisation (LAPO) – Nigeria
• Caisse du Mouvement Mutualiste Béninois (CMMB)  – Benin
• CUMO Microfinance Limited (Cumo)  – Malawi
• Mutuelle d'Epargne et de Crédit de l'Association Femmes Entreprises Rurales du Nord (MEC AFER)  – Senegal
• Kokari  – Niger

For a detailed look into the social performance activities of an African MFI, stay tuned for our upcoming interview with the Small Enterprise Foundation (SEF) of South Africa, which will discuss their experiences with participatory appraisals, poverty outreach, and client retention strategies.