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Innovations in Managing Social Performance


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Innovations in Managing Social Performance

  1. 1. Innovations in Managing Social Performance based on communication prepared by Social Performance Task Force Gaamaa Hishigsuren Director of Research, IDEAS Member of ImpAct consortium and SP Task force [email_address]
  2. 2. Overview <ul><li>What is social performance? </li></ul><ul><li>Why is social performance important? </li></ul><ul><li>What does it mean to manage performance? </li></ul><ul><li>How can MFIs manage social performance? </li></ul><ul><li>What role does assessment play? </li></ul><ul><li>How can we assess social performance? </li></ul><ul><li>How do management, assessment, reporting relate? </li></ul><ul><li>Is social performance a costly diversion? </li></ul><ul><li>What are some efforts to Assess and Manage? </li></ul><ul><li>Where to go for further information? </li></ul>Introduction Managing Social Performance Assessment and Reporting Resources and Next Steps
  3. 3. <ul><li>The effective translation of an institution’s mission into practice in line with their values </li></ul><ul><ul><li>Process : actions and corrective measures </li></ul></ul><ul><ul><li>Results : reaching target clients, meeting client needs, change </li></ul></ul><ul><ul><li>Values : Relations w/employees, clients, community and the environment </li></ul></ul><ul><ul><li>Neither incidental nor implicit </li></ul></ul>What is Social Performance? . Intent Operations Results
  4. 4. Why Is Social Performance Important? <ul><li>SP is an end to financial services which is means </li></ul><ul><li>It demonstrates intention of investors and MFIs </li></ul><ul><li>It delivers on potential of microfinance to contribute to the MDGs * </li></ul><ul><ul><li>Reduce extreme poverty and </li></ul></ul><ul><ul><li>hunger </li></ul></ul><ul><ul><li>Improve primary education </li></ul></ul><ul><ul><li>Promote gender equality </li></ul></ul><ul><ul><li>and empower women </li></ul></ul><ul><ul><li>Improve health </li></ul></ul>. *Millennium Development Goals Social Performance Financial Performance Mission
  5. 5. What Does It Mean to Manage Performance? <ul><li>Microfinance institutions have a mission that sets double bottom line: social and financial goals. Therefore, performance management </li></ul><ul><li>concerns both social and financial </li></ul><ul><li>performance </li></ul><ul><li>Performance must be defined and </li></ul><ul><li>measured </li></ul><ul><ul><li>What is explicitly defined and </li></ul></ul><ul><ul><li>measured gets managed </li></ul></ul><ul><ul><li>Need to define desired </li></ul></ul><ul><ul><li>performance </li></ul></ul><ul><ul><li>Need to measure against </li></ul></ul><ul><ul><li>desired performance </li></ul></ul>. Performance Management Social Performance Financial Performance Mission
  6. 6. How Can MFIs Manage Social Performance? <ul><li>SPM is a management approach not one ‘tool’ or list of indicators. </li></ul><ul><li>Apply social lens to performance management </li></ul><ul><ul><li>Translate mission into guiding goals and objectives </li></ul></ul><ul><ul><li>Monitor and assess performance towards goals and objectives </li></ul></ul><ul><ul><li>Use information to improve practice </li></ul></ul><ul><li>Build on existing systems and processes </li></ul><ul><ul><li>Appraisal, reward, communication </li></ul></ul><ul><ul><li>Information system to monitor & assess performance </li></ul></ul><ul><ul><li>Decision-making processes </li></ul></ul>Social Performance Pathway Monitoring Use Intent Design Results Social Performance Pathway Assessment Intent Operations Results
  7. 7. Managing Social Performance: ImpAct consortium <ul><li>Three main components : </li></ul><ul><li>Defining clearly social performance goals and objectives based on organization’s mission and strategy </li></ul><ul><li>Assessing and monitoring social performance outcomes through integrated information system </li></ul><ul><li>Using the info in management decision making to improve social performance </li></ul>
  8. 8. What Role Does Assessment Play? <ul><li>Used by Internal and external stakeholders </li></ul><ul><ul><li>Improve practice </li></ul></ul><ul><ul><ul><li>Outreach, </li></ul></ul></ul><ul><ul><ul><li>Products and services </li></ul></ul></ul><ul><ul><ul><li>Change in people’s lives </li></ul></ul></ul><ul><ul><li>Monitor and benchmark performance </li></ul></ul><ul><ul><li>Define good practice…and re-define microfinance </li></ul></ul><ul><ul><li>Inform investment to realize potential of microfinance </li></ul></ul><ul><ul><ul><li>Is microfinance good development investment? </li></ul></ul></ul><ul><ul><ul><li>Where is investment needed? Where? </li></ul></ul></ul>
  9. 9. How Can We Assess Social Performance? <ul><li>Internal periodic and ongoing assessment (MIS or informal info system): </li></ul><ul><ul><li>Who are the clients reached and excluded? </li></ul></ul><ul><ul><li>Whether clients’ needs are met? </li></ul></ul><ul><ul><li>What changes are brought about in clients’ well being? </li></ul></ul><ul><li>Internal audit and social performance review: </li></ul><ul><ul><li>Quality of social performance management system </li></ul></ul><ul><li>External social audit and rating </li></ul><ul><ul><li>Verify and assess degree and nature of social performance </li></ul></ul><ul><ul><ul><li>Process : actions and corrective measures </li></ul></ul></ul><ul><ul><ul><li>Results : reaching target clients, meeting client needs, change </li></ul></ul></ul><ul><ul><ul><li>Values : Relations w/employees, clients, community and the environment </li></ul></ul></ul><ul><ul><li>Support an external enabling environment Information for practitioners, public and private investors and policy makers </li></ul></ul><ul><ul><ul><li>Trustworthy </li></ul></ul></ul><ul><ul><ul><li>Consistent </li></ul></ul></ul><ul><ul><ul><li>Comparable </li></ul></ul></ul>
  10. 10. Do Management, Assessment, Reporting Relate? <ul><li>Three main Assessment Approaches Emerging </li></ul><ul><ul><li>Assess MFIs’ intent, design, results to own standards </li></ul></ul><ul><ul><ul><li>Reaching target clients </li></ul></ul></ul><ul><ul><ul><li>Meeting client needs </li></ul></ul></ul><ul><ul><ul><li>Achieving changes desired </li></ul></ul></ul><ul><ul><li>Compare relative MFI standards to industry standards </li></ul></ul><ul><ul><li>Assess absolute results against industry standards </li></ul></ul><ul><ul><ul><li>Specific standardised indicator: e.g. % of children in school </li></ul></ul></ul><ul><ul><ul><li>Broad standardised indicators, allowing for local definition </li></ul></ul></ul><ul><li>Need To Achieve Balance </li></ul><ul><ul><li>Simple, standard reporting </li></ul></ul><ul><ul><li>Varied contexts, missions, development norms </li></ul></ul>
  11. 11. Is Social Performance A Costly Diversion? <ul><li>SP is Fundamental Intention of Microfinance, hence it is necessary cost of doing business </li></ul><ul><li>Initial Evidence Demonstrates Cost-effectiveness of Systems </li></ul><ul><ul><li>Build on existing systems </li></ul></ul><ul><ul><li>More research on the way… </li></ul></ul><ul><li>Manage institutional and developmental Imperatives and trade-offs </li></ul><ul><li>Realize Potential of Microfinance—Contribution to MDGs </li></ul><ul><li>Better investment decisions </li></ul><ul><ul><li>Private investors </li></ul></ul><ul><ul><ul><li>Pick winners: invest is what works, </li></ul></ul></ul><ul><ul><ul><li>Affirm good practice </li></ul></ul></ul><ul><ul><ul><li>March investment with rhetoric </li></ul></ul></ul><ul><ul><li>Public investors </li></ul></ul><ul><ul><ul><li>Defining and pushing frontier…taking risks—what investment? Where? How? </li></ul></ul></ul>
  12. 12. What are some efforts? Illustrative examples
  13. 13. Assessing Social Performance: Cerise <ul><li>Examines 4 dimensions : </li></ul><ul><li>Targeting the poor and the excluded </li></ul><ul><li>Adaptation of the services </li></ul><ul><li>Improvement of the clients’ social capital </li></ul><ul><li>Social responsibility of the MFI </li></ul>
  14. 14. Targeting Outreach to the poor and the excluded <ul><li>3 main strategies for targeting: </li></ul><ul><li>Geographic : Selection of the zones of intervention </li></ul><ul><li>Individual : Use of targeting tools </li></ul><ul><li>Pro-poor  methodology : </li></ul><ul><ul><li>Social collateral, </li></ul></ul><ul><ul><li>Specific approach for remote areas or excluded population, </li></ul></ul><ul><ul><li>Size of transaction </li></ul></ul>
  15. 15. Meeting clients’ needs in relation to their capacity <ul><li>MicroSave tools: </li></ul><ul><li>Qualitative assessment tools : Market research, product attribute ranking, relative preference ranking, financial landscape, etc </li></ul><ul><li>SEEP-AIMS tools: </li></ul><ul><li>Qualitative and Quantitative tools : </li></ul><ul><ul><li>Client satisfaction tool </li></ul></ul><ul><ul><li>Exit survey </li></ul></ul><ul><ul><li>Loan and savings use tool </li></ul></ul>
  16. 16. Measuring changes in the clients <ul><li>AIMS-SEEP tools 5 client assessment tools (2 quantitative and 3 qualitative tools) </li></ul><ul><li>Management information system indicators for monitoring changes </li></ul>
  17. 17. Developing Social Indicators <ul><li>CGAP and Ford Foundation </li></ul><ul><li>Monitoring progress on 5 to 10 indicators that correspond to 5 dimensions of Millennium Dev. Goals </li></ul><ul><li>Common reporting format allows comparison across different contexts </li></ul><ul><li>Primarily proxy indicators with 35 participating MFIs </li></ul><ul><li>Discussion with MIX on how to report </li></ul>
  18. 18. Where To Go For Further Information? <ul><li>Social Performance Resource Center </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Management training </li></ul></ul><ul><ul><li>Technical Assistance </li></ul></ul><ul><ul><li>Tools </li></ul></ul><ul><ul><li>Rating, audit and other forms of assessment </li></ul></ul><ul><li>Imp-Act consortium : </li></ul><ul><ul><li>Consortium of seven organizations: FFH, IDEAS, MFC, EDA, CARD, MCPI, and IDS </li></ul></ul><ul><ul><li>Capacity building (training and mentoring) modules to assist MFIs in managing social performance </li></ul></ul><ul><ul><li>Action research </li></ul></ul><ul><ul><li>Network for practitioners </li></ul></ul>
  19. 19. <ul><li>Thank You! </li></ul>