Kiva Cerise Spi Feb2010 Intro Spi(Day1&2)

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Kiva Cerise Spi Feb2010 Intro Spi(Day1&2)

  1. 1. Introduction to the Social Performance Indicators (SPI) tool
  2. 2. 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
  3. 3. 1. Background to SPI
  4. 4. Background to SPI Development process  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. But, no tools!
  5. 5. 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
  6. 6. 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
  7. 7. Background to SPI Who uses SPI? Oikocredit, Kiva, AFD, Sidi, Grameen-Crédit Social Investors Agricole… way to dialogue with partners, raise awareness of SP Foro Lac Fr, RFR, MFI Networks Finrural, CIF, Consortium Benchmarking SP, Alafia… standardized reporting, MIS MFIs > 250 SPI audits in CERISE/ProsperA database
  8. 8. 2. The SPI in a nutshell
  9. 9. The SPI tool What is it?  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
  10. 10. 1. SPI Layout Two documents Questionnaire Operational Guide Part 1: Basic details Audit methodology Rationale Part 2: Indicators (4 dimensions) Definition/Examples Guidelines Information sources
  11. 11. The SPI tool What does it do? 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? NOT Intent Internal Outputs Outcomes systems/activities IMPACT ANALYSIS!
  12. 12. The SPI tool Content of Questionnaire  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
  13. 13. The SPI tool Questionnaire – Part Two Dimension 1: Targeting and Outreach Geographic Selection of operating zones Client selection devices that Individual favour poor and excluded people Pro-poor methods Services characteristics that facilitate access of the poors and excluded
  14. 14. The SPI tool Questionnaire – Part Two Dimension 2: Products and Services Diversity of credit, Range of services voluntary savings Decentralization, rapidity, Quality of services transparency, drop-outs Direct or through Innovative and non partnership: transfers, financial services mobile banking, fin ed
  15. 15. The SPI tool Questionnaire – Part Two Dimension 3: Benefits to clients Tracking changes, impact Economic benefits studies, profit-sharing Level and quality of Client participation participation Group formation, Social capital/client collective management, empowerment client advocacy
  16. 16. The SPI tool Questionnaire – Part Two Dimension 4: Social Responsibility Salary scale, training, To employees participation in decisions, turn-over To clients Consumer protection Respect of local culture, To the community local development, and environment environmental protection
  17. 17. The SPI tool Dimension 1: Targeting & Outreach Criteria 1: Geographic targeting evaluates 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
  18. 18. The SPI tool Dimension 1: Targeting & Outreach Criteria 2: Individual targeting evaluates 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
  19. 19. The SPI tool Dimension 1: Targeting & Outreach Criteria 3: Pro-poor methodology Evaluates 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
  20. 20. The SPI tool Dimension 2: Products & Services Criteria 1: Range of services Evaluates 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
  21. 21. The SPI tool Dimension 2: Products & Services Criteria 2: Quality of services Evaluates 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%
  22. 22. The SPI tool Dimension 2: Products & Services Criteria 3: Innovative and non financial services Evaluates 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
  23. 23. The SPI tool Dimension 3: Benefits to clients Criteria 1: Economic benefits Evaluates 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
  24. 24. The SPI tool Dimension 3: Benefits to clients Criteria 2: Client participation Evaluates to what extent clients are involved in decision making 3.9 Are elected client representatives involved at the management level? 0 = No 1 = Yes
  25. 25. The SPI tool Dimension 3: Benefits to clients Criteria 3: Social capital Evaluates 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”
  26. 26. The SPI tool Dimension 4: Social Responsability Criteria 1: SR to employees Evaluates 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 %
  27. 27. The SPI tool Dimension 4: Social Responsability Criteria 2: SR to clients Evaluates 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
  28. 28. The SPI tool Dimension 4: Social Responsability Criteria 3: SR to the community and environment Evaluates 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
  29. 29. The SPI tool Question format 1.5 Does the MFI have regular service points located in areas where there are no other MFIs or bank branches? SPS 11b-f 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) away. 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: ______
  30. 30. The SPI tool Methodological options  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)
  31. 31. The SPI tool Why use the SPI? Quick & easy to apply; Simple  easy to verify Results presented in Easy to analyze  radar and diamond graphs Standardized results  Compatible with SPS Peer group analysis
  32. 32. The SPI tool 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
  33. 33. The SPI tool Example of results: urban MFI 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
  34. 34. 3. SPI and SPM
  35. 35. SPI and SPM SPI as an entry point to SPM  SPI as a diagnostic tool  SPI as a management tool  SPI as a communication tool
  36. 36. Social Performance Management Three main components 1. Setting clear social objectives and strategy 2. Monitoring progress in meeting these objectives 3. Using social performance information to make decisions Data collection and use of information is at the heart of SPM
  37. 37. SPI and 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)
  38. 38. SPI and SPM SPI as a management tool  Once identifying priority areas with the SPI, the SPI can be combined with other tools to address them An MFI wants to… SPM Tool Understand/ Improve overall SP or avoid mission drift Internal social audit (ex.: SPI) Expand outreach to the very poor PPI/PAT Understand high drop-out rates Market research Verify decision making processes to Governance analysis integrate SP data
  39. 39. SPI and SPM SPI as a communication tool Good SPM hinges on effective communication of the social performance agenda to all stakeholders  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
  40. 40. SPI and SPM For investors, the SPI is also… A diagnostic tool Does the MFI reflect the investor’s own values? between MFI-investor, between A communication tool investors-sharesholders, among investors Id’s priorities for managing relationships with MFIs & A governance & reduces investment risks management tool through better knowledge of partners / potential capacity building
  41. 41. Working groups: Filling up the SPI questionnaire
  42. 42. 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!
  43. 43. 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 tool

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