Social Performance

Management (SPM)

Isabelle Kidney

Bless Darkey

CuTRAC

2013

Introductions

Name

Occupation/job

A note on the delivery

• Technical Language

• Misunderstanding

• Note any word or term I use, which you think needs a definition or clarification

• ASK !

Mark Twain – “the only dumb (silly) question is the one you don’t ask”

Thursday Friday

Social Performance Assessment Poverty Assessment Tools

Session 1

Orientation and Social Performance Mgt. Overview

Session 1

Poverty Assessment Tools

Session 2

Social Performance Appraisal

Session 2

Poverty Assessment Tools: Application

Session 3

Social Performance Appraisal

Ends

Session 4

Social Performance Appraisal: Application

Objective

Familiarise participants with the concept of Social Performance Management and how to assess the status of SPM at Credit Union level

Session 1: Overview of Social Performance

Session 2: Presentation and Practice of SP Assessment Tool

Session 3: Practice of SP Assessment Tool

Session 4: Feedback and Roll Out

• Social Performance Management

• Knowledge Management

• Expansion into Under-mm served mm areas

• Capacity Building

National apex body

developed & strengthene

d

Credit Unions & member-

ship

Poor and Extremely

poor

Regional Hub &

Steering Group

West African Credit Unions Against Poverty Programme

What do we mean by ‘social’ in relation to

credit union financial services?

(what ‘good’ are we hoping to help bring about?)

Photos credit: Fonkoze, Haiti

Why talk about Social Performance?

What problems can financial service providers cause members / clients / customers?

Big Problems?

What Went Wrong ?

Commercial Mission Drift:

Fast growth (15-30% + p.a)

High competition

Market saturation

Coercive collection practices

Over-indebtedness …

Financial Mission Drift:

High return on investment

expected

Minimize costs, maximize profits

Fast profitability

Few products

IPOs (stock market launch) …

Social Performance Cannot Be Taken for Granted

• Member dissatisfaction, distress (and exit)

• Over-indebtedness or multiple loans

• Lack of understanding of costs related to terms and conditions

• Complaints about staff

• Limited benefit of financial services for the member

• Unserved segments of the community

• Unmet needs

Social Performance Drivers

Member Level Organisational Level

• Underserved people (women, youth, rural): Financial Inclusion

• Poorly managed remittances: Product and Service Development

• Need for linkage with non financial support: Product and Service Development

• Low usage of certain products: Client satisfaction

• Loan repayment problems: Client protection

• CUs focus is on financial performance: Double bottom line

• CU staff use coercive practices to get high repayment rates: Client protection

• CUs face difficulty in retain good staff: Staff satisfaction

• Fierce competition between providers: Client protection

If the CU wants to demonstrate…..

In order to … It must provide

FINANCIAL INCLUSION / OUTREACH

Verify whether membership matches targeting objectives…

Basic indicators on the number of poor and excluded people served

PRODUCTS AND SERVICES IMPROVEMENTS

Verify to what extent the CU fulfils the needs of the members…

Information on satisfaction levels of members with products and services

CLIENT PROTECTION

Ensure that CUs are responsible to their members….

Information on compliance with client protection principles (transparency around pricing etc.)

SOCIAL RESPONSIBILITY TO STAFF, COMMUNITY & ENVIRONMENT

Ensure that CUs meet acceptable standards (e.g. human resource policies) and make special efforts to be socially responsible ….

Information on staff satisfaction, HR policies, work conditions and special CU initiatives regarding community and environment

CHANGES TO CLIENTS LIVES Illustrate accomplishment of mission …..

Information on changes to members livelihoods (next level up is impact assessment)

Required Systems for Most Common Social

Performance Indicators Common Social Performance Indicators Systems

• Number of Female Members

• Volume of activities (savings, loans)

• Members by urban / rural category

• Member Profiles

• Satisfaction with products & services

• Preventing over-indebtedness

• Level of over-indebtedness

• Staff job satisfaction

• MIS

• MIS

• MIS

• Poverty assessment tool

• Client satisfaction survey

• Interviews with managers

• Member interviews

• Staff survey

Intent & Design

Internal Systems/ Activities

Outputs Outcomes

Where do you start?

INTENT AND DESIGN What is the mission of the institution?

Does it have clear social objectives?

INTERNAL SYSTEMS & ACTIVITIES

What activities will the institution undertake to achieve its social mission? Are systems designed and in place to achieve those objectives?

OUTPUTS

Does the institution serve poor and very poor people? Are the products designed to meet their needs?

OUTCOMES

Have clients experienced social and economic improvements?

Impact

IMPACT Can change in client welfare be attributed

to institutional activities?

AMK Company Profile

• Largest number of borrowers in Cambodia : > 300,000

• Outreach to > 10,000 villages: > 70% of the villages in Cambodia

• Absolute Commitment to Mission: 50% of new clients in 2011 were

below the Cambodia Rural Food Poverty Line

• Leader in Social Performance Management and Responsible Finance

• Finance at Your Doorstep Methodology: Loan disbursement and

collection at community level

• Average Loan Size lowest of nationwide MFIs in Cambodia: USD 172;

94% of loans are for less than USD 300

• Lowest interest rates in the group lending market

Key Stats

• Population: 14.1 million

• GNI per capita, Atlas method: USD 750

• Poverty Level: 30%

Mature SPM Example – AMK Cambodia

AMK Client Profile

• 50% are below Poverty Line

• 87% of clients are female

• 63% of clients are literate, and 81% attended some school

• Average household has 5.2 persons including 3 income earners

• Clients are predominantly rural, but 63% of clients’ main source of cash

inflow is non-farm activity; 35% is farm activity

• Food is one of the top three expenditures for 96% of clients

• 83% of clients own land, but 76% of clients have no toilet facilities

• 33% of clients’ economic situation stayed the same in the previous 12

months; 55% improved, and 13% worsened

The Definition of Social Performance

The effective translation of an institution’s mission into practice

Vision: your idea of a better world

Mission: your idea of how to bring this about

Mission Statement: To serve increasing numbers of poor people and female headed households thereby

helping to improve their livelihoods.

Mission

Component

Objective: what

exactly you want

to achieve?

Indicators: what

are you going to

measure to show

progress?

Fill In the Gaps

Approach t Social Performance

Balance of financial and social performance

Focus on social performance creates business value – for example

• appropriate products (e.g. low loan ceilings, flexibility of repayment) … leads to higher repayment rates

• suitable delivery system serving clients in remote areas

• demand patterns reflecting member cash flows

• member retention

• Higher staff satisfaction higher member satisfaction

Social performance is management’s responsibility; performance

appraisal of General Manager / CU Manager reflect the expected

balance between financial and social performance

Social Performance Committee at governance level advises

management on strategic directions, social research, reporting, it

provides recommendations to management and the Board

Aligning systems to SPM – e.g. monitoring compliance of operations

to SP principles is allocated to internal audit team; where possible

social data are captured by MIS

Institutionalising SPM

Do Good & Do No Harm

• Maximise the appropriateness of the financial services

• Focus on lifting people out of poverty and contributing to economic development

• Act responsibly towards members, staff, volunteers & community

ILCUF SPM Assessment Questionnaire

Overview

ILCUF SPM Assessment Questionnaire

Home Instructions Results: Scoring Results: Graphics

Questionnaire Dimensions - Outreach & Inclusion - Member benefit & welfare - Governance - Responsibility to Staff &

Volunteers - Community & Environment - Cooperation amongst Cooperatives

ILCUF SPM Assessment Questionnaire

Some notes on the Questionnaire: - It is a refined, simplified composite of other tried and tested

assessment tools - It takes into account International Cooperative Principles - It sets highest standards in a very wide and deep range of SPM issues - It is a tool and needs to be incorporated into the Management

Information System for decision making purposes - Be aware of ‘lingo’ in this tool and ask for explanation

You are the pioneers!

ILCUF SPM Assessment Questionnaire

How it works

- Questionnaire administered by regional manager / WACUPP / CU managers to board member, staff member and CU manager

- Takes a half day to complete and another half a day to ensure proper reporting

- Under each heading there are a number of questions under a set of sub-headings

ILCUF SPM Assessment Questionnaire

How it works

- For scoring purposes, each sub-heading is weighted as ‘critical’ (most important / essential), ‘high’ (important), or ‘medium’ (desirable, relevant)

- Team picks a statement that most closely matches their CU

- Automatic scoring on table and ‘web’ graphs

- Report back to board and CUA / Bless / board / AGM

- Conduct on an annual basis

ILCUF SPM Assessment Questionnaire Exercise: Carry out the SP Assessment in Groups of 4

1. Decide who is going to make the final presentation

2. Agree on the parameter of the exercise (pick one CU that all the group know or

the average CU in the region etc.)

3. Rotate who is using the laptop, one section per person

4. The person who is using the laptop is asking the questions

5. Take one section and then sub-heading at a time, read out the related statements, and discuss and agree which statement most closely resembles the CU situation

6. Answer ‘Yes’ in the adjacent cell, insert justification & continue to the next question…

ILCUF SPM Assessment Questionnaire

Open Floor Exercise

Outreach & Inclusion

ILCUF SPM Assessment Questionnaire

Feedback Sessions

Each group present back one section

(last group present back last two short sections)

Feedback & Clarifications on Each Section

From SP assessment to SP management

SPA vs. SPM: two different things!

Social Performance Management

SPA

a measure of how well an institution uses its

systems and operations to generate positive social benefits

SPM the use of this measure

to make decisions

Example from Mali (adapted from Cerise)

Managing for Social Results

Define desired

performance

Measure progress

toward desired

performance

Use performance

results to improve

products, services,

& systems

30% new

members are

female

New

membership

recorded by

CU staff and

reported to

board

CuTRAC

training led to

more

inclusion of

women

Achieve Your Mission Through Performance

Management

Mission

Performance Management

Social

Performance

Financial

Performance

ILCUF SPM Assessment Questionnaire

Plan for Rolling out SPM

Recap Questions?

• Why can we not take social performance for granted?

• Where should the starting point be for social performance?

• Name three of the headings under the social performance assessment tool.

• Who is the driver of social performance in a credit union?