"Financial and Social Performance" Micol Pistelli, Mixmarket

440 views
329 views

Published on

Published in: Technology, Health & Medicine
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
440
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • On last October, WWB and MIX launched a survey to test a set of indicators aiming at understanding certain key areas of MFIs’ performance from a gender perspective. Seven quantitative indicators were selected based on the criteria of being useful for benchmark analysis. WWB and MIX think that these indicators should be tracked by all MFIs with a women’s empowerment agenda and we hope that MFIs will be reporting them to MIX in the near future. The survey was sent to 171 MFIs, 86 of which responded and 66 were included in the final sample for analysis. Of these 66 MFIs, 46 declared to have a specific “gender-equality and women’s empowerment” focus in their mission, while the remainder 20 had no specific gender focus. As you can see from the table, we received responses from all the regions, with a higher representation from LAC and ECA. It is common perception that microfinance services lead to women’s empowerment by positively influencing women’s decision-making power and enhancing their overall socio-economic status. The MFIs with a specific goal on women’s empowerment and gender equality are expected to have a more proactive agenda in terms of reaching out to female clients, better repayment rates and female client retention, services tailored around specific women’s needs and higher percentage of staff composed of women. So let’s see what the results of this test are telling us.
  • I would first like to ask you whether you think that MFIs with a women’s empowerment/gender equality agenda be offering services that promote a holistic approach to women’s empowerment, beyond enterprise services? These can be services such as leadership training for women or women’s rights education/gender issues?
  • Surprisingly, the majority of MFIs with a gender focus agenda do not offer training on enterprise skills and business development, which is normally considered to be the key non financial service aiming at facilitating women’s access to income-generating opportunities. A higher number, however, offers trainings on women’s leadership, women’s rights education and counseling for women who are, for example, victims of violence. These latter services are offered by only few MFIs without a specific gender- focus. It would be interesting to investigate more why MFIs with a gender-focus agenda are not investing more in business training. Is that because of the type of business activities run by women? Or are there other factors?
  • Let’s now have a look at the indicators tested. The first one is the female borrowers retention rate, calculated asnumber of active borrowers in the current year divided by the sum of new borrowers current year and active borrowers in the previous year. Borrower retention rate is a very useful indicator as a high client retention means lower administrative costs for the MFI, as renewals are processed quickly and loan officers spend less time recruiting new clients. From a client perspective, client retention is considered a positive indicator if it signals that clients are happy with the services and can use credit to increase their income. Unfortunately, MFIs are not commonly tracking number of new clients segmented by gender, despite the fact they declare that it is an easy indicator to report. In fact, we were able to calculate client retention only for less than half of MFIs in our sample. Results show that, on average, the female borrower retention rate is 8.4 percentage points higher than that of their male peers among gender-focused MFIs, and 6.25 percentage points higher in the control group. Despite the pattern, the magnitude of the difference should be considered carefully given the small sample. Nevertheless, this data provides evidence to support the hypothesis that women are more loyal clients than men, and that serving women makes sense also from a ‘business perspective’. Of course client retention rates need to be compared to client satisfaction assessment with products to draw any conclusion on whether this is a really positive indicator for female clients. Given the relevance of this indicator, we hope that more MFIs will start to track number of new clients by gender in the near future.
  • It is interesting to notice that women represent the majority of clients served by MFIs, independently on whether the MFI has a specific gender-focuses agenda or not. MFIs’ with a gender focus show a higher outreach in female clients. Both data in the sample and in MIX’s database containing data for over 1,500 MFIs confirm that women are the favorite target group of MFIs worldwide. Why is that the case? Many MFIs argue that the rationale for lending to women is that they are a more socially responsible investment than men, and there is evidence to support this claim; however MFIs might also choose to target women because they are easier to form into groups. There has been research that has showed that many female clients never touch the money that is lent to them, they hand it over to the husband, in which case any sort of empowerment can occur, as the women are accountable for repaying a loan they have no control over. MFIs in South Asia are considering shifting towards a more gender-balanced portfolio, which could be a good thing for women. It is important to continue to study whether women have indeed control over their loan as MFIs should be targeting only those women with a reasonable chance of using the loan themselves.
  • A second indicator tested was the gross loan portfolio segmented by gender. This indicator is already commonly tracked by MFIs
  • Looking at the average loan balance, female average loan balance is lower than male. This might be linked to the type of activity run by women, to the higher poverty rates among female clients or to the higher acceptance of smaller loans by women.
  • A third indicator tested was portfolio at risk. Studies have shown that repayment rates are higher among female borrowers and the targeting of women is sometimes considered a technique in its own right to enhance MFIs’ repayment performance, alongside group lending. These are several theories behind why is it the case: women can be better credit risks because of the type of business they carry out, or perhaps because they are more risk averse or because they are easier to monitor and enforce.In our sample, unfortunately, results are inconclusive. Of the 38 MFIs who provided valid answers, we found out that 43% of them had female borrowers PAR >30 lower than total PAR and an equal percentage had female borrowers PAR higher. The size of the sample doesn’t allow to draw any conclusion, except the one that MFIs are not currently segmenting PAR data by gender. This is a very important indicator, as it can be used as a baseline for further investigation around reasons for better o worse repayment by women. So we hope that in the future MFIs will be able to report on this indicator
  • The fourth indicator tested was female staff retention rate, an indicator easy to be reported by MFIs.
  • For this indicator we have found that female staff turnover rate is just 0.49 percentage points lower than the total staff turnover rate, so there is no really difference in female turnover based on what these MFIs have reported. However, in terms of percentage of female staff, gender focuses MFIs, surprisingly, have a lower percentage of female staff than the non gender focused. There are regional differences however. Asia is the region with the lowest percentage of female staff and LAC the one with the highest. In particular, only 20% of loan officers among Asian MFIs are female, vis-à-vis 41% in LAC and a median of 36% in Africa, MENA and ECA.If then we have to look at female representation among the board, the highest percentage is registered in ECA and it is just 29%.It is commonly understood that crucial components of a proactive women’s empowerment strategy include the utilization of female loan officers and the provision of equal employment and management opportunities for women, so it is disappointing to find that the MFIs with a gender-equality agenda are not really proactive in this sense
  • The fifth indicator tested was financial literacy. The question was how many clients received financial literacy education and, among them, how many were female clients
  • We know that financial literacy is very important to develop clients’ skills to compare and select the best products for their needs, and empower them to exercise their rights and responsibilities as consumers. Interestingly, data from 25 observations of MFIs with a gender-focus clearly show that the vast majority of clients participating in financial literacy classes were women. This data may suggest that exists a bias for financial literacy targeting women, although of course to be seen this as an empowering tool, we have to look at what are the financial education objects and content of these courses, so this is material for further investigation.
  • The sixth indicator tested was poverty outreach. This is one of the most difficult indicators for MFIs to track. Of the over 1,000 MFIs reporting social performance data to MIX, less than 10% is able to report poverty data of their clients. When asked to the MFIs of the sample to report the number of female clients below the poverty line and, how many of the clients were new, only 17 MFIs in total between gender-focused (14) and control group (3) were able to provide an answer
  • Out of the 66 MFIs included in our sample:86% (57) ranked “Poverty reduction” as a development goal48% (32) reported to MIX that they measure poverty21% (14) reported to offer some special product and/or service specifically targeting the poor and very poor. While figures across MFIs can’t be compared because of the very different poverty measurement tools used, the basic statistics tell us that MFIs report a slightly higher proportion of female clients above the poverty line than below it. Nevertheless, the poverty rates of female clients appear higher to total poverty rates, as median number of clients below poverty lines is usually around 30%. MIX has interviewed 21 MFIs, not part of this sample, on why MFIs do not commonly tracking this indicator. Several issues have been identified, among which general lack of knowledge of the tools available and their utility, how to use the poverty data to improve operations, and general lack of demand from the investors side in this type of data. Nevertheless we will keep collecting this indicator to see whether in the future we will be able to gain more insights about poverty levels of clients in microfinance, also from a gender perspective
  • The last indicator tested was more a question regarding whether the MFIs collect data on the education levels of their clients. As we can see, this is an indicator rarely collected, and mostly just at the time of loan disbursement rather than as an indicator linked to women’s empowerment. This is also an indicator difficult to interpret and to establish attribution to women’s access to financial services.
  • Last question for you, is whether you will be considering, after this conference, to go back to your country and speak with your management about the possibility of tracking these indicators. It is the time to express your voice with this poll….
  • "Financial and Social Performance" Micol Pistelli, Mixmarket

    1. 1. Microfinance Information Exchange Gender Indicators Test Micol Pistelli Amman, November 20th, 2013 The Premier Source for Microfinance Data and Analysis This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    2. 2. The survey  66 replies  Gender-equality focused MFIs vs. Control group Genderfocused Control group East Asia and the Pacific (EAP) 3 4 Easter Europe and Central Asia (ECA) 11 8 Latin America and the Caribbean (LAC) 19 6 Middle East and North Africa (MENA) 2 1 South Asia 7 1 Africa 4 0 46 20 REGION TOTAL 2 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    3. 3. Poll #1 Should MFIs with a women’s empowerment/gender equality agenda be offering non financial services that promote women’s empowerment? 3 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    4. 4. Non financial services for women’s empowerment Training on enterprise skills/ business development Yes No Gender-focused 16 30 9 11 Training on women’s leadership /women’s rights education/ counseling Yes No Gender-focused 23 23 3 17 Control-group Control-group 4 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    5. 5. INDICATOR 1: Female borrowers retention rate Borrower retention rate – MIX’s formula Number of active borrowers current year / (New borrowers current year + Number of active borrowers previous year). In our example, FY2012 is the current year and FY2011 is the previous year. EASY? Gender-focused Control group Yes 44 19 USEFUL? Gender-focused Control group Yes 43 15 Data show that female retention rate is higher No 2 1 No 0 2 I don't know 0 3  Easy and useful…but not commonly tracked 5 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    6. 6. Is gender-equality focus synonymous of higher female borrowers outreach? Survey - % female borrowers FY2012 Gender-focused (41) Control group (17) Median 60.36 51.13 Average 65.37 58.97 25th percentile 47.20 43.72 75th percentile 93.79 85.42 Women represent the majority of MF clients. The MFIs with a specific gender agenda show a higher outreach in female clients MIX - % female borrowers FY2012 Gender-focused Control group Median 76.74 63.78 Average 81.91 69.68 25th percentile 50.18 48.53 75th Percentile 103.18 88.68 6 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    7. 7. INDICATOR 2: Female gross loan portfolio Can MFIs disaggregate gross loan portfolio by gender? EASY? Yes No Gender-focused 44 2  Easy, useful and Control group 18 2 tracked USEFUL? Yes No I don't know Gender-focused 43 2 1 Control group 15 3 2 7 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    8. 8. Is there a difference between female and male average loan balance? Survey – Average loan balance FY2012 (in USD) Median Average Gender-focused Female Male 725 1128 1078 1325 Control group Female Male 708 975 997 1349 25th percentile 260 680 375 662 75th percentile 1328 1697 1181 1774 MIX – Average loan balance FY2012 (in USD) GLOBAL Median Average 25th percentile 75th percentile Female 871 1574 379 1783 Male 1170 2044 527 2196 …with wide regional differences 8 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    9. 9. INDICATOR 3: Portfolio at risk EASY? Yes No Valid answer Gender-focused 25 20 25 Control group 18 2 13  Useful but not so USEFUL? Gender-focused Control group Yes 42 15 No 1 3 I don't know 0 2 easy and not consistently tracked 9 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    10. 10. INDICATOR 4: Female staff retention rate EASY? Yes No Gender-focused 44 1 Control group 18 2  Easy, useful and tracked USEFUL? Yes No I don't know Gender-focused 37 2 5 Control group 12 5 3 10 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    11. 11. Do MFIs with a gender equality agenda have a higher percentage of female staff? Survey - % female staff Median Average 25th percentile 75th percentile Gender-focused (total, 44) 37.1 40.39 27.71 50 Gender-focused (excluding South Asia, 39) 40.48 43.35 17.2 93 Control group 47.08 42.91 35 53.01 No correlation between gender equality agenda and presence of women among staff MIX data:  Asia is the region with the lowest percentage of female staff  Women are still low represented at the board and management level 11 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    12. 12. INDICATOR 5: Financial literacy outreach  EASY? Yes No Gender-focused 32 13 Control group 13 7 USEFUL? Yes No I don't know Gender-focused 31 5 7 Control group 13 5 1 Useful but not that easy to track and report on 12 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    13. 13. Is financial literacy targeting gender biased? Survey - % of clients outreached by financial literacy training Gender-focused (25 obs.) Control group (6 obs.) Female Male Female Male Median 79.21 20.79 59.50 40.50 Average 76.65 23.35 62.64 37.36 25th percentile 57.33 0 53.79 20.84 75th percentile 100 42.67 79.16 46.21 13 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    14. 14. INDICATOR 6: Poverty outreach EASY? Yes No Gender-focused 14 30  Control group 8 12 to track and report on USEFUL? Yes No I don't know Gender-focused 31 6 8 Control group 14 4 2 Useful but difficult 14 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    15. 15. Why poverty tracking is not part of the MFIs’ agenda? 100% MIX data, FY 2011 90% 80% Cite poverty reduction as goal 70% 60% Cite poverty reduction as goal and report poverty measurements 50% Cite poverty reduction as goal (all regions, n=844) 40% 30% Cite poverty reduction as goal and report poverty measurements (all regions, n=844) 20% 10% 0% MENA (n=24) SSA (n=167) SA (n=174) EAP (n=74) LAC (n=240) ECA (n=119) Poverty level female clients FY2011 (Survey, 17 observations) Below Above Median 48.63% 51.37% Average 46.66% 53.34% 25th percentile 34.09% 38.69% 75th percentile 61.31% 65.91% 15 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    16. 16. INDICATOR 7: Client’s children education level TRACKING CHILDREN'S EDUCATION LEVEL No Gender-focused Control group 32 11 EASY? Gender-focused Control group USEFUL? Gender-focused Control group Yes 7 7 Yes 20 5 Yes, but only at the time of loan disbursement 10 7 No 38 13 No 13 11 Yes, we collect them regularly to monitor change in access to education 3 2 Not clear how useful and difficult to track and report on I don't know 12 4 16 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    17. 17. A gender-mainstreaming indicators agenda Women’s empowerment through microfinance does not happen incidentally. MFIs need to be deliberate about their gender- mainstreaming agenda and proactive in defining specific products, services and strategies, particularly regarding:  Financial and non financial services offering, as credit access might not be enough Provision of equal employment and management opportunities to promote higher representation of women in staff and board Financial literacy courses offering with a clear target to female consumers’ rights and responsibilities Assessment of the control that women have over loans so that targeting them for credit access is a truly good strategy for their empowerment Assessment that high female retention rate numbers are accompanied by an increase in income levels This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited. 17
    18. 18. Measuring gender indicators: a call to action To recap… The basic indicators that WWB and MIX recommend MFIs to start tracking are: 1. 2. 3. 4. 5. Female borrowers retention rate Female gross loan portfolio Female portfolio at risk Female staff retention rate Female financial literacy outreach And, if you have a proactive agenda on poverty monitoring: 6. Female clients poverty rates 18 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    19. 19. Poll #2 If you are an MFI, will you consider tracking and reporting these indicators ? 19 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    20. 20. THANK YOU! 20 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    21. 21. MIX Global and Project Partners MIX partners with a dedicated group of industry leaders: 21 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.
    22. 22. Microfinance Information Exchange Headquarters: 1901 Pennsylvania Ave., NW, Suite 307 Washington, D.C. 20006 USA Visit us on the Web: www.themix.org www.mixmarket.org Regional Offices: Baku, Azerbaijan Contact us: info@themix.org 44 J. Jabbarli st. Caspian Plaza I, 5th Floor, Baku, Azerbaijan Lima, Peru Jirón León Velarde 333 Lince, Lima 14, Perú Interested in learning more about MIX? Sign up to receive our free e-mail newsletters! Dakar, Senegal Villa n°4, rue YF-632, cité Ablaye Thiam Ouest-Foire, Dakar-Sénégal Hyderabad, India Find us on Facebook Follow us on Twitter: @mix_market Road #12, Landmark Building, 5th Floor, Banjara Hills, Hyderabad 500034, India 22 This presentation is the proprietary and/or confidential information of MIX, and all rights are reserved by MIX. Any dissemination, distribution or copying of this presentation without MIX’s prior written permission is strictly prohibited.

    ×