Presentation by Julie DenèveNovember 2015
MFIs as social entreprises?
Helping MFIs become more socially responsible
– Luxembourg-based NGO specialised in microfinance and inclusive finance since1994
– Active in West Africa, Central and Latin America, South-East Asia, MENA region and Luxembourg
– Beneficiaries :150 microfinance institutions 5 million people
– Staff: 40 people based in Luxembourg – 1 office in Tunis
– Funding: 70% from the Ministry of Foreign Affairs of Luxembourg
ADA – Appui au Développement Autonome
• The sector is promoting social values such as reducing client vulnerability, alleviating poverty, etc.
• The products delivered by MFIs are intended to solve social problems : poverty, gender gap, lack of access to education, health, savings, insurance, etc.
But, although social goals are a common denominator, the strategy to reach them is sometimes quite different.
How about the way those products are delivered?Mission drifts and microfinance crises
Social orientation in MF
Towards more responsibilityNecessity for the sector to become more responsible through: • Client protection • Social performance management
Several tools and standards have been built up to help MFIs improve and prove their social practices and results.
SMART CAMPAIGN
Design and deliver appropriate product
Prevent client overindebtnessAre transparentAdopt responsible pricingTreat respectfully and fairly their
clientsProtect privacy of client dataAdopt effective complain
resolution
SPTF
Define and Monitor Social GoalsEnsure Board, Management, and
Employee Commitment to Social Goals
Treat Clients ResponsiblyDesign Products, Services, Delivery
Models and Channels That Meet Clients’ Needs and Preferences
Treat employees ResponsiblyBalance Financial and Social
Performance
Best practices
Social Performance Management (SPM) is the effective translation of an institution’s mission into
practice in line with accepted social values.
Source: Social Performance Task Force
Intent & Design
Internal Systems/Activities
Outputs Outcomes
INTENT AND DESIGNWhat is the mission of the institution?Does it have clear social objectives?
INTERNAL SYSTEMS & ACTIVITIESWhat activities will the institution undertake to achieve its social mission?
Are systems designed and in place to achieve those objectives?
OUTPUTSDoes the institution serve poor and very poor people?Are the products designed to meet their needs?
OUTCOMES Have clients experienced social and economic improvements?
IMPACTCan change in client welfare
be attributed to institutional activities?
Impact
Social performance management – Dimensions and Tools
Source : SPTF
From a socially performant MFI to a social enterprise…Social Performance Management has the objective to improve the sector and MFIs practices
A step towards MFIs being considered as social enterprises
Depending on the MFI status, its context but also on its will to balance its social and financial mission, the MFI will be more or less socially performant.
Julie DenèveResearch & Development Project [email protected]
ADA39, rue GlesenerL-1631 LuxembourgTel.: +352 45 68 68 1
www.ada-microfinance.lu
Thank you for your attention!