Learning to Cost-Effectively
    Asses and Manage Social
          Performance
               Day-Long Course
Africa-Middl...
OVERVIEW

•Rationale, Background and
 Concepts

•Managing and Assessing Social
 Performance

•Some Resources
Rationale, Background
      Concepts
Double bottom line attraction

What does this mean?
Double bottom line attraction

Microfinance has economic logic + social/ethical basis
Double bottom line attraction

Microfinance has economic logic + social/ethical basis

                             • A so...
Double bottom line attraction

Microfinance has economic logic + social/ethical basis

                             • Grow...
Social value/social returns in microfinance?




    Do we see it clearly ?
Social concerns

Lack of clarity
(mission, social responsibility)

Mission drift

Reputation risk
Mission drift?

• Microfinance = microproducts intended for the
  „poor‟ and for „poverty reduction‟ (Millennium
  Develop...
Reputational risk
• High – and deceptive - interest rates charged to clients
• Coercive debt collection practices
• High p...
Adverse media and political
           attention

           “The crushing burden of microcredit”

In …, FRANCE 24 reporte...
Therefore …. Social Performance

                 • New focus in microfinance
                 • Restore the balance

    ...
Growing interest in social performance


Global initiatives including
• The Social Performance Task Force (started 2005)
 ...
First task for the Social Performance Task Force




• To agree a definition for Social Performance
What is Social Performance?

The effective translation of an institution’s
           mission into practice
              ...
Social Performance Pathway

• About process and results – the steps to achieve impact:




    MISSION



              In...
Dimensions           PROCESS: INTENT AND DESIGN
                 What are the mission and values of the MFI?
of Social    ...
Social Performance vs Impact
            Assessment
Social Performance              Impact
• Intent, systems …and         ...
Managing and Assessing Social
        Performance
FOUR MINI CASE STUDIES

These are real life examples

Each group discuss one example:

1.   Clarify concepts/terminology
2...
FOUR MINI CASE STUDIES

Key lessons learned:
• Information
• Clarity
• Adjusting systems
• Integrating into management
• E...
Dimensions           PROCESS: INTENT AND DESIGN
                 What are the mission and values of the MFI?
of Social    ...
Implications

  Social Performance is both process and results
• Putting mission and social values into practice is not
  ...
Social Performance Management

The process of translating mission into
 practice, including setting social
 objectives, tr...
Social Performance Management
2.3a

  Social Performance Management
            Components
1. Developing social goals and objectives

2. Monitoring and ...
3.1a

          Types of Social Goals

• Reaching target clients
  Who will the MFI reach?

• Meeting target-client needs
...
3.1f

              People’s Bank Case Study:
              Social Goals and Objectives
     Social Goals                 ...
2.3a

  Social Performance Management
            Components
1. Developing social goals and objectives

2. Monitoring and ...
4.1a

    Information Sources Learning
               Points
• To understand patterns and trends, you need some
  informat...
4.2a

Social Performance Management
 Information System Learning
             Points
• You already have many sources of in...
2.3a

  Social Performance Management
            Components
1. Developing social goals and objectives

2. Monitoring and ...
5.2a

     Decision-Making Key Points

• When managing Social Performance, it is important
  to understand the potential t...
6.3a

     Integrating Social Performance
    Management Into an Organization
• It is important to have a systemic view of...
2.2c
          Social Performance Pathway:
            Strategy and Operations




• Goals
                      • System ...
6.2a

  Social Performance Management
         Benefits and Costs
• What are the benefits of Social Performance
  Manageme...
6.2b

   Benefits of Social Performance
     Management Information
• More appropriate products and services for clients

...
6.2c

Costs and Resource Requirements for
  Social Performance Management

• Impact survey: high cost in terms of time and...
Tools and Strategies for Social
    Performance, include:
…And…
Small Enterprise Foundation - SEF
Small groups work:

• Group 1: What are the main characterisctics of SEF SPM
  approach ...
Some Resources
SEEP NETWORK
    www.seepnetwork.org

•     Glossary of terms in Social Performance
•     Progress Briefs
     –    #1: Ov...
Imp-Act
www.imp-act.org
•    What can SPM do for you?
•    Managing your social performance
•    Learning and support


No...
CGAP
www.cgap.org/portal/
•   Focus Note #41 May 2007
  Beyond Good Intentions: Measuring the Social Performance of Microf...
The MiX
http://www.themix.org/standards/social-performance
Social Performance Task Force

http://www.sptf.info/
Social Responsibility




Bringing Pro-Consumer Ideals to the Client:
A Consumer Protection Guide for Financial
  Institut...
Poverty Assessment Tools

•   The Progress out of Poverty Index (PPI),
    Grameen Foundation
    www.progressoutofpoverty...
www.microfinancegateway.org

    Library
    Hot topic

    Fundamentals
    Overview
    Glossary
    Web Resource Guide
...
What Do We Do Next?

• Let‟s take few minutes to reflect on what to do
  next…
Thank You!
        Please do be in touch


cloupeda@freedomfromhunger.org
AMERMS Course 1: Learning to Cost-Effectively Assess and Manage Social Performance - PPT 1
AMERMS Course 1: Learning to Cost-Effectively Assess and Manage Social Performance - PPT 1
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Learning to Cost-Effectively Assess and Manage Social Performance
ROOM: Impala/Lake Turkana
FACILITATED BY: Freedom from Hunger
Mr. Christian Loupeda (USA)

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AMERMS Course 1: Learning to Cost-Effectively Assess and Manage Social Performance - PPT 1

  1. 1. Learning to Cost-Effectively Asses and Manage Social Performance Day-Long Course Africa-Middle East Regional Microcredit Summit Kenyatta International Conference Center Nairobi - Kenya April 2010
  2. 2. OVERVIEW •Rationale, Background and Concepts •Managing and Assessing Social Performance •Some Resources
  3. 3. Rationale, Background Concepts
  4. 4. Double bottom line attraction What does this mean?
  5. 5. Double bottom line attraction Microfinance has economic logic + social/ethical basis
  6. 6. Double bottom line attraction Microfinance has economic logic + social/ethical basis • A social enterprise • Financial and social MISSION returns • Financial – a means social to a social end; has social value financial
  7. 7. Double bottom line attraction Microfinance has economic logic + social/ethical basis • Growing ‘professionalisation’ in MISSION past 15 years social • Transformation from NGOs into commercial entities • Focus on the financial financial • What about the social?
  8. 8. Social value/social returns in microfinance? Do we see it clearly ?
  9. 9. Social concerns Lack of clarity (mission, social responsibility) Mission drift Reputation risk
  10. 10. Mission drift? • Microfinance = microproducts intended for the „poor‟ and for „poverty reduction‟ (Millennium Development Goals) • What are we achieving? What is the evidence? • Are we serving the poor – who do we mean by „poor‟? • Are transforming MFIs staying true to the original reason for which microfinance started?
  11. 11. Reputational risk • High – and deceptive - interest rates charged to clients • Coercive debt collection practices • High profits to investors (at the expense of clients) • Small trade financing in a saturated market (Thanks to the loan I can buy and sell more tomatoes, but my neighbour may sell less) • Rapid growth - leading to: culture of pushing debt, multiple micro-lending, over-indebtedness of clients,
  12. 12. Adverse media and political attention “The crushing burden of microcredit” In …, FRANCE 24 reporters find that far from alleviating poverty, microcredit has been plunging people deeper into debt. The technique of loan staff is to scare borrowers and insult them April 2008, video on line;
  13. 13. Therefore …. Social Performance • New focus in microfinance • Restore the balance MISSION • To support transparency and effectiveness social • Define what we are aiming for • Ensure that we are doing financial what we say we are
  14. 14. Growing interest in social performance Global initiatives including • The Social Performance Task Force (started 2005) - defining issues, engaging the sector; coordinating role: • Multiple stakeholders: –NGOs, MFIs –Networks/Associations –Donors –Social Investors –Microfinance Raters –Action Research Programmes/Universities
  15. 15. First task for the Social Performance Task Force • To agree a definition for Social Performance
  16. 16. What is Social Performance? The effective translation of an institution’s mission into practice in line with accepted social values Mission Values
  17. 17. Social Performance Pathway • About process and results – the steps to achieve impact: MISSION Intent Operations Results IMPACT
  18. 18. Dimensions PROCESS: INTENT AND DESIGN What are the mission and values of the MFI? of Social Does it have clear social objectives? Performance PROCESS: INTERNAL SYSTEMS & OPERATIONS Are systems designed and in place to achieve those objectives? RESULT: OUTPUTS Does the MFI serve target clients? poor and excluded people? Do the services meet their needs? RESULT: OUTCOMES Have clients experienced social and economic improvements? RESULT: IMPACTS Can these improvements be attributed to institutional activities?
  19. 19. Social Performance vs Impact Assessment Social Performance Impact • Intent, systems …and • The end result(s) results • Change attributed to the • Focus: Improving systems intervention: Focus on to achieve social goals proving impact • On-going – integration into • Costly, complex, post facto management research exercise • MIS, range of information methods – practical, cost- • Results are often disputed effective on account of attribution, self-selection etc
  20. 20. Managing and Assessing Social Performance
  21. 21. FOUR MINI CASE STUDIES These are real life examples Each group discuss one example: 1. Clarify concepts/terminology 2. What problems do you see? 3. Share any similar experience 4. How can the MFI respond – to become more effective in serving its clients and achieving its social goals? (Think systems e.g. staff orientation? more information? ……) 1 person to present from each group
  22. 22. FOUR MINI CASE STUDIES Key lessons learned: • Information • Clarity • Adjusting systems • Integrating into management • Everything contributes – organisational culture
  23. 23. Dimensions PROCESS: INTENT AND DESIGN What are the mission and values of the MFI? of Social Does it have clear social objectives? Performance PROCESS: INTERNAL SYSTEMS & OPERATIONS Are systems designed and in place to achieve those objectives? RESULT: OUTPUTS Does the MFI serve target clients? poor and excluded people? Do the services meet their needs? RESULT: OUTCOMES Have clients experienced social and economic improvements? RESULT: IMPACTS Can these improvements be attributed to institutional activities?
  24. 24. Implications Social Performance is both process and results • Putting mission and social values into practice is not automatic, it has to be part of deliberate management Involves a series of steps to achieve change Information about results must feed back to the organization to influence strategy and operations Imp-Act!
  25. 25. Social Performance Management The process of translating mission into practice, including setting social objectives, tracking Social Performance, and using information to improve practice
  26. 26. Social Performance Management
  27. 27. 2.3a Social Performance Management Components 1. Developing social goals and objectives 2. Monitoring and assessing performance 3. Improving operations
  28. 28. 3.1a Types of Social Goals • Reaching target clients Who will the MFI reach? • Meeting target-client needs How will the MFI meet the needs of its clients? • Change in target clients’ lives What positive changes will the MFI contribute to in the lives of its target clients?
  29. 29. 3.1f People’s Bank Case Study: Social Goals and Objectives Social Goals Social Objectives Reaching target clients: • In each of the next 3 years, deepen outreach of Poor women and their services to poor households, reaching at least families 50% “poor” and 10% “very poor” among new clients Meeting target- client • Reduce client exit rate by 20% in the next 3 needs: years Providing quality • Increase client satisfaction by 15% in the next 3 financial services years Change in target • In each of the next 3 years, reduce poverty level clients‟ lives: of clients and their families by moving at least Improving their well- 50% of clients up one level of the poverty scale being
  30. 30. 2.3a Social Performance Management Components 1. Developing social goals and objectives 2. Monitoring and assessing performance 3. Improving operations
  31. 31. 4.1a Information Sources Learning Points • To understand patterns and trends, you need some information on a routine basis, which we refer to as monitoring • To understand the reasons underlying a trend, you may need additional information from time to time, which we refer to as assessment
  32. 32. 4.2a Social Performance Management Information System Learning Points • You already have many sources of information • Start with what you have, and expand from there only when there is a clear need • Let your Social Performance Management system evolve over time, instead of trying to build from scratch
  33. 33. 2.3a Social Performance Management Components 1. Developing social goals and objectives 2. Monitoring and assessing performance 3. Improving operations
  34. 34. 5.2a Decision-Making Key Points • When managing Social Performance, it is important to understand the potential trade-offs or tensions that may exist between the pursuit of social and financial goals • It is most important to consider short-term trade-offs if you consider that, as a social enterprise, your MFI‟s mission, reflected in social goals and objectives, are ends, and financial sustainability is the means to achieving those ends
  35. 35. 6.3a Integrating Social Performance Management Into an Organization • It is important to have a systemic view of Social Performance. It relates to your entire way of working and to the design of your organization • Create an enabling internal environment for Social Performance Management by building buy-in, aligning systems, and establishing an organizational culture that supports the achievement of your mission
  36. 36. 2.2c Social Performance Pathway: Strategy and Operations • Goals • System use • Objectives • Service delivery • Range of products • Human resources and services
  37. 37. 6.2a Social Performance Management Benefits and Costs • What are the benefits of Social Performance Management? • What are the costs and resources required? • How do you verify that the system is cost-effective?
  38. 38. 6.2b Benefits of Social Performance Management Information • More appropriate products and services for clients • Better service for clients • Higher retention of clients • Program growth • Lower operational costs • Demonstrate Social Performance to external stakeholders
  39. 39. 6.2c Costs and Resource Requirements for Social Performance Management • Impact survey: high cost in terms of time and money • Focus group discussions: low cost, but requires trained and experienced personnel • Individual interviews: cost depends on number of interviews; requires trained personnel
  40. 40. Tools and Strategies for Social Performance, include:
  41. 41. …And…
  42. 42. Small Enterprise Foundation - SEF Small groups work: • Group 1: What are the main characterisctics of SEF SPM approach (First paragraph)? • Group 2: What strategic elements charaterize SEF SPM mechanism ? Explain how they fit together (Second paragraph)? • Group 3: What are the systems and and tools that SEF set up to manage its social performance (Third paragraph)? • Group 4: What adjustments did SEF make to its operations for a successful SPM (Fourth paragraph) ?
  43. 43. Some Resources
  44. 44. SEEP NETWORK www.seepnetwork.org • Glossary of terms in Social Performance • Progress Briefs – #1: Overview of Social Performance – # 2: Social Performance Management – # 3: Assessment tools – # 4: Social Rating • Social Performance Map • Social Performance – Reporting Framework
  45. 45. Imp-Act www.imp-act.org • What can SPM do for you? • Managing your social performance • Learning and support Now available online: Putting the 'social' into performance management: A practice-based guide for microfinance An online SPM Resource Centre SPM Network: spmnetwork.net
  46. 46. CGAP www.cgap.org/portal/ • Focus Note #41 May 2007 Beyond Good Intentions: Measuring the Social Performance of Microfinance Institutions
  47. 47. The MiX http://www.themix.org/standards/social-performance
  48. 48. Social Performance Task Force http://www.sptf.info/
  49. 49. Social Responsibility Bringing Pro-Consumer Ideals to the Client: A Consumer Protection Guide for Financial Institutions Serving the Poor • ACCION Monograph series No. 14, 2006 www.publications.accion.org/publications/Bringing _P_207.asp www.campaignforclientprotection.org
  50. 50. Poverty Assessment Tools • The Progress out of Poverty Index (PPI), Grameen Foundation www.progressoutofpoverty.org • IRIS Poverty Assessment tools (USAID) www.povertytools.org/implementation.html.
  51. 51. www.microfinancegateway.org Library Hot topic Fundamentals Overview Glossary Web Resource Guide FAQs Tools 4
  52. 52. What Do We Do Next? • Let‟s take few minutes to reflect on what to do next…
  53. 53. Thank You! Please do be in touch cloupeda@freedomfromhunger.org

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