Making Finance Responsible:

Assessing Social Performance of

Microfinance Institutions

The role of the Microfinance Associations

Network Meeting – SPTF – Jordan 2012

Microfinance knowledge exchange network focused on Ethical and Responsible Finance

Core members: five French organizations specialized in microfinance

Partners: MFIs, networks, donors, researchers, and investors in Africa, Latin America and Asia

Themes: impact and social performance, rural and agricultural finance, governance.

www.cerise-microfinance.org

CERISE

ProsperA network

PROmotion of Social PERformance – an Alliance initiated by CERISE and its partners

Over 70 members (Dec. 2011) Networks from Africa, Asia and Latin America MFIs TA providers from Europe Social investors

www.cerise-microfinance.org

Introductions & Expectations

SPI, a social audit tool for MFIs Developed since 2000 with MFIs & partners

Full assessment of social performance Identify strengths & weaknesses Communicate Compare to peers (CERISE database)

Fully aligned with Mix Market (automatic) Integrates standards of the sector (CPP,USSP, Seal…) Free access to SPI and guide (with info to Cerise) Widely used in the MF sector by Networks, TA

providers, Investors

Who uses SPI?Background to SPI

MFIsOver 500 SPI audits in CERISE/ProsperA database

(about 400 MFIs)

MFI NetworksBenchmarking SP, standardized

reporting, MIS

Social Investorsway to dialogue with partners,

raise awareness of SP

LAC: Foro Lac Fr & its members (RFR,

Finrural,…) Africa: AFMIN mb, CIF Asia: SPTF WG, MCPI

Oikocredit, Kiva, Grameen-Crédit

Agricole, AFD/Proparco,

GoodReturn, etc

Transparency, capacity-building and advocacy on Social Performance Main challenge for credibility and sustainable growth of the sector

Key role of the networks See the Decision Tree for networks / SEEP support to MFA

Social assessment as an entry point for SP Strategy

Rich experience of the networks so far Foro Lac Fr in Latin America (started SPI audits in 2007) CIF in West Africa + AFMIN in Africa Asian networks launching SPI audits

Part One: Basic details on the MFI, Profile, Social Strategy, Financial performance, Governance

Part Two: 70 Social Performance Indicators Dimension 1: Targeting and Outreach Dimension 2: Products and Services Dimension 3: Benefits to Clients Dimension 4: Social Responsibility

Content of QuestionnaireThe SPI tool

Each dimension is broken into 3 criteria and has 16-19 questions for a

total of 25 points

Standards of use of SPI Principles: the SPI charter The SPI tool: always use the latest version Process: the SPI Operational guidelines

The steps for internal/external – Centralised/participatory The process for verification and quality control

The staff: knowledge about SPI/ Links with Cerise – ProsperA (updated on training, tools, experiences, etc.)/ Certification

Reporting: Individual report/ national analysis + report data to Cerise/ProsperA database (peer group)

Internal self-assessment (+/- 3hours) or external audit

Centralized (top management) or participatory approach (different stakeholders and levels of the MFI)

1-3 day process (centralized) / 4-6 day (participatory)

The SPI tool

Methodological options

Context and strategies

• Rural, women business sector• Mature MFI• Previous crises in MF sector

(i.e: over-indebtedness, mission drift) has pushed social agenda forward

SPI results• Strong and balanced performance

• Range of services and Benefits to clients can be improved

The SPI tool

Example of results: A participatory MFI

0%

20%

40%

60%

80%

100%

Targeting the poor and excluded

Adaptation of services

Benefits to clients

Social responsibility

0%

20%

40%

60%

80%

100%Geographic Targeting

Individual targeting

Pro-poor methodology

Range of traditional services

Quality of servicesInnovative and non

financial servicesEconomic benefits

Client participation

Empowerment

SR towards staff

SR towards clients

SR towards community and environment

Cerise Data base: Comparing MFI

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%Geographic targeting

Individual targetingMethodological

targeting

Range of financial services

Quality of servicesInnovative&non-financial services

Economic benefits for clients

Clients’ participation

Empowerment

SR towards staff

SR towards clients

SR towards community

Average of + Yes + SPI3 + Bolivia (12 MFIs)

Average of + CRECER 2008 SAEA (1 MFIs)

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

Targeting / Outreach

Adaptation of services

Benefits for clients

Social responsibility

Average of + Yes + SPI3 + Bolivia (12 MFIs)

Average of + CRECER 2008 SAEA (1 MFIs)

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%Geographic targeting

Individual targetingMethodological

targeting

Range of financial services

Quality of servicesInnovative&non-financial services

Economic benefits for clients

Clients’ participation

Empowerment

SR towards staff

SR towards clients

SR towards community

Average of + Yes + SPI3 + Bolivia (12 MFIs)

Average of + CRECER 2008 SAEA (1 MFIs)

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

Targeting / Outreach

Adaptation of services

Benefits for clients

Social responsibility

Average of + Yes + SPI3 + Bolivia (12 MFIs)

Average of + CRECER 2008 SAEA (1 MFIs)

No_Redit Yes No_Redit (Tous)SpiGene SPI3 SpiGene (Tous)EvalType (Tous) EvalType (Tous)SPI Evaluation (Tous) SPI Evaluation CRECER 2008 SAEACountry Bolivia Country (Tous)Region (Tous) Region (Tous)ForPro-NonForPro (Tous) ForPro-NonForPro (Tous)GouvType (Tous) GouvType (Tous)ZoneInterv (Tous) ZoneInterv (Tous)Target Market (Tous) Target Market (Tous)Outreach (Tous) Outreach (Tous)Scale (Tous) Scale (Tous)Age (Tous) Age (Tous)FinancialIntermediation (Tous) FinancialIntermediation (Tous)TypeInterv (Tous) TypeInterv (Tous)

Select results from an evaluation or a group of evaluations from your

database

Select other results from an evaluation or a group of evaluations

from your database

Criteria 1: Choose the country(Ex: Bolivia)

Criteria 2: Choose the MFI(Ex: Crecer)

Examples of the role of the Networks

CIF in West Africa: Assessment & Management

2008, training on SPI + Set up a Reference Group (12 managers, 2 by members) 2009: Peer reviews using the SPI tool. 2010, Define an Action plan:

reach more family agriculture => overview of practices increase outreach to women & vulnerable gp improve savings services better use of surpluses => work in progress set up a social performance M&E and impact

assessment system => see reports + dashboards

SPI Training

Ag practices

Social report

SPI Social report

Peer Review

Workshops Field work

CIF - Continued 2011, focus on two areas:

financial services for rural development and family farms

Consumer protection. Early 2012, the six cooperatives applied the

Smart Campaign’s self-assessment tool, A full-blown assessment of members’

practices is expected to take place later in 2012 through peer reviews coordinated by CERISE.

Workshops Field work

Social Report

Smart self assessment

CPP Peer Review

CPP

Agriculture

Social Reports

From SPI to Social Dashboards

Value-added of the Networks Knowledge of the members (accurate

assessment, also linked to peer control) Economies of scale (improving capacities to

conduct audits, capacities to work over time on action plans)

Member-focused agenda: advocacy (e.g. RFR), capacity-building / strategic decisions (e.g. CIF), transparency (e.g. Finrural, Amucss)

Services for the members

More informations…

CERISE website: www.cerise-microfinance.org

Contact CERISE:cerise@cerise-microfinance.org

SPI Wiki Pagehttp://spiwikiv3point3.pbworks.com