Kiva Cerise Spi Feb2010 Intro Spi(Day1&2)

transcript

Introduction to the Social

Performance Indicators (SPI)

Overview

1. Background to the SPI

2. The SPI in a nutshell

3. SPI and SPM

Objective

Familiarize participants with the SPI and its use as a

Social Performance Assessment tool and entry

point to Social Performance Management

1. Background to SPI

Background to SPI

90’s: Emphasis was on financial performance,

little attention for social performance

First discussions in 2001 (CERISE & partner

MFIs): Microfinance and social links

A need to improve accountability + visibility for

social performance, in order to promote

microfinance’s core priority.

Development process

But, no tools!

Background to SPI

Development process of SPI initiative SPI 1 (2001 – 2003) - Conceptual framework (research and practitionners)

- SPI tool version 1

SPI 2 (2004 – 2005) - Field testing: 25 MFIs in different contexts

- SPI version 2 and operational guide

SPI 3 (2006 – 2009) - Promotion of SP, association with SPTF

- SPI version 3 compatible with MIX SPS

SPI4 (2009 – 2011)

SPI for the investors

Work with MFIs to innovate and improve practices: rural finance, new products, savings, consumer protection, client surveys, MIS

Background to SPI

Most recent version of SPI (3.1)

Fully compatible with Social Performance

Standards reported to MIX

Includes indicators on social responsibility to

the environnement, interest rates, consumer

protection principles

Who uses SPI?

Background to SPI

> 250 SPI audits in CERISE/ProsperA database

MFI Networks

Benchmarking SP,

standardized reporting, MIS

Social Investors

way to dialogue with

partners, raise

awareness of SP

Foro Lac Fr, RFR,

Finrural, CIF,

Consortium

Alafia…

Oikocredit, Kiva,

AFD, Sidi,

Grameen-Crédit

Agricole…

2. The SPI in a nutshell

A questionnaire

Self-administered by MFI or done by external auditor

Participatory or centralized approach

Graphical results; possibility of review by external auditor

An operational guide to accompany questionnaire

Methodology to conduct the social audit

Rationale for each of the indicators

Sources of information

=> Available on line www.cerise-microfinance.org

What is it?

The SPI tool

1. SPI Layout

Two documents

Questionnaire Operational Guide

Audit methodology

Rationale

Definition/Examples

Guidelines

Information sources

Part 1: Basic details

Part 2: Indicators (4 dimensions)

Audits the internal processes the MFI has in place for reaching its social mission.

Intent

What is the MFI’s mission? Does it have clear social objectives?

Internal systems and activities

Are they in place to help achieve objectives?

Outputs

Does the MFI know whether it’s reaching target clients?

Outcomes

Does the MFI know whether its clients have seen improvement?

What does it do?

The SPI tool

IMPACT

ANALYSIS!

Intent Internal

systems/activities

Outputs Outcomes

Part One: Description of MFI, Context, Social Strategy, Financial performance

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

Each dimension is broken down into three criteria

Content of Questionnaire

The SPI tool

Questionnaire – Part Two

Dimension 1: Targeting and Outreach

Selection of operating

Client selection devices that

favour poor and excluded people

Services characteristics that

facilitate access of the poors

and excluded

Geographic

Individual

Pro-poor methods

Dimension 2: Products and Services

Diversity of credit,

voluntary savings

Decentralization, rapidity,

transparency, drop-outs

Direct or through

partnership: transfers,

mobile banking, fin ed

Range of services

Quality of services

Innovative and non

financial services

The SPI tool

Dimension 3: Benefits to clients

Tracking changes, impact

studies, profit-sharing

Level and quality of

participation

Group formation,

collective management,

client advocacy

Economic benefits

Client participation

Social capital/client

empowerment

The SPI tool

Dimension 4: Social Responsibility

Salary scale, training,

participation in decisions,

turn-over

Consumer protection

Respect of local culture,

local development,

environmental protection

To employees

To clients

To the community

and environment

The SPI tool

Dimension 1: Targeting & Outreach

Criteria 1: Geographic targetingevaluates how MFI selects operating areas

1.5 Does the MFI have regular service points located in areas where there

are no other MFIs or bank branches?

0= No branch or less than 5%

1= Yes, less than 30 % of the branches

2= Yes, more than 30% of the branches

The SPI tool

Criteria 2: Individual targetingevaluates how MFI selects clients

1.6 Does the MFI use a targeting tool to select poor clients?

0= for less than 10% of new clients over the last year

1= for less than 50% of new clients over the last year

2= for more than 50% of new clients over the last year

The SPI tool

Criteria 3: Pro-poor methodologyEvaluates design of services that target the poor or

excluded

1.14 Does the MFI provide small loans (≤ 30% GNI per capita) to facilitate

access for the poor?

0 = small loans < 30% of the total number of active clients

1 = small loans < 50% of the total number of active clients

2= small loans ≥ 50% of the total number of active clients

The SPI tool

Dimension 2: Products & Services

Criteria 1: Range of servicesEvaluates diversity of product mix

2.3 Does the MFI provide loan products specifically tailored to clients’ social

needs?

0 = No specific loan products

1 = One or more specific loan product

The SPI tool

Criteria 2: Quality of servicesEvaluates quality using objective & verifiable proxies

2.12 What percentage of clients dropped out of the MFI during the last

accounting year?

0 = More than 30%

1 = 15-30%

2 = Less than 15%

The SPI tool

Criteria 3: Innovative and non financial

servicesEvaluates efforts to innovate/ go beyond strict

financial services

2.18 Does the MFI (or partnering institution) offer services that address

social needs?

0 = No

1 = Yes

The SPI tool

Criteria 1: Economic benefitsEvaluates efforts to promote and measure

improvement in clients’ economic sitation

3.1 Does the MFI track changes in the poverty levels or economic status of

clients over time?

0 = No information collected on changes to the economic status of clients

or only anecdotal evidence of changes

1= Regular monitoring of changes to the economic status of clients

The SPI tool

Criteria 2: Client participationEvaluates to what extent clients are involved in

decision making

3.9 Are elected client representatives involved at the management level?

0 = No

1 = Yes

The SPI tool

Criteria 3: Social capitalEvaluates MFI actions to reinforce clients’ social ties

3.15 Does the MFI or partnering institution offer support services that

specifically aim at women’s empowerment ?

0 = No/offers services for women but none that aim at empowerment

1= Yes, offers one or two products/services designed for women with a

“transformative objective”

2= Yes, offers more than two products/services designed for women with a

“transformative objective”

The SPI tool

Dimension 4: Social Responsability

Criteria 1: SR to employeesEvaluates working conditions

4.2 What percentage of staff is employed with a long-term contract?

0 = less than 40 %

1 = more than 60 %

2 = more than 80 %

The SPI tool

Criteria 2: SR to clientsEvaluates the six principles of consumer protection

4.8 Prevention of over-indebtedness: What does the MFI do to avoid client

over-indebtedness

0 = Nothing in particular

1 = Some efforts made

2 = Efforts made to prevent over-indebtedness and measures have been

taken after identification of over-indebtedness

The SPI tool

Criteria 3: SR to the community and

environmentEvaluates MFI’s contributions to local economic,

social and cultural development as well as

environmental protection

4.15 Does the MFI have a policy defining social responsibilities to the

community?

0 = No, Policy under development or planned

1 = Informal policy reflected in operations

2 = Yes, a formal, written policy

Question format

The SPI tool

1.5 Does the MFI have regular service points located in areas where there are no

other MFIs or bank branches?

Definitions: A regular service point includes MFI branches, mobile banking agencies or

delivery devices operating at least one day a week. An area is considered to have no other

MFI or bank branches when a service point is located at least 50 km (or more than 2 hours)

0= No branch or less than 5%

1= Yes, less than 30 % of the branches

2= Yes, more than 30% of the branches Please specify:

Number of clients served in these areas: _______________

Number of service points in areas without other banks/MFIs: _____

Percentage of clients served in these areas

Percentage of service points in these areas: ______

SPS 11b-f

Internal self-assessment 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

Simple

Why use the SPI?

The SPI tool

Results presented in

radar and diamond

graphs

Easy to analyze

Standardized results Compatible with SPS

Peer group analysis

Quick & easy to apply;

easy to verify

Example of results: participatory MFI

Context and strategies

• Rural, women business sector

• Mature MFI

•Previous crises in MF sector

(over indebtedness, mission drift)

pushed social agenda forward

SPI results

•Strong and balanced

performance

•Range of services and

transparency can be

improved

The SPI tool

Context and strategies

• Mainly urban sector

• Urban and mainly commercial

approach

SPI results

• Clear focus on services

• Good SR towards staff

• Weak targeting and SR

• Client participation is not in

the MFI model

Example of results: urban MFI

The SPI tool

3. SPI and SPM

SPI as a diagnostic tool

SPI as a management tool

SPI as a communication tool

SPI and SPM

SPI as an entry point to SPM

1. Setting clear social objectives and strategy

2. Monitoring progress in meeting these

objectives

3. Using social performance information to

make decisions

Social Performance Management

Three main components

Data collection and use of information

is at the heart of SPM

SPI as a diagnostic tool

Gives an overview on social performance for the MFI,

strengths and weaknesses

Help identify priorities for the MFI to improve SP

Identifies key criteria to be followed

Serves a basis for an internal control system (“social

dashboard” or social scorecard)

SPI and SPM

SPI as a management tool

SPI and SPM

Once identifying priority areas with the SPI, the SPI can

be combined with other tools to address them

An MFI wants to…

Understand high drop-out rates

Expand outreach to the very poor

Verify decision making processes to

integrate SP data

Understand/ Improve overall SP or

avoid mission drift

Market research

PPI/PAT

Governance analysis

Internal social audit (ex.: SPI)

SPM Tool

The SPI promotes transparent communication within MFI

(Board, general assembly, etc.), with investors, clients, the

sector, authorities and the general public

Consistent results, easy to prepare reports and briefs

Showcases good practices, highlights efforts to improve

Creates a common language on social aspects of

microfinance and contributes to benchmarks

SPI as a communication tool

SPI and SPM

Good SPM hinges on effective communication of the social

performance agenda to all stakeholders

For investors, the SPI is also…SPI and SPM

A diagnostic tool

A governance &

management tool

A communication tool

Does the MFI reflect the investor’s

own values?

Id’s priorities for managing relationships with MFIs & reduces investment risks

through better knowledge of partners / potential capacity

building

between MFI-investor, between

investors-sharesholders, among

investors

Working groups:

Filling up the SPI questionnaire

Rules of the working groups

1. In each group, one person represents a MFI

2. Fill in the SPI questionnaire, with the help of the operational guide

3. Please note any question you have regarding the indicators.

Part One: [half an hour to one hour]

Each dimension: [1/2 hour to one hour]

Objective: a completed SPI questionnaire at the end of the session!

Results of the Exercise

Clarifying questions on the SPI

tool/dimensions/criteria/indicators/use of

the operational guide

Discussing the graphs and use of the SPI

Kiva Cerise Spi Feb2010 Intro Spi(Day1&2)

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