Measuring the social mission of microfinance
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The document discusses MIX, an organization that collects social performance data from microfinance institutions. It outlines MIX's indicators for social performance measurement, the process for MFIs to report data to MIX, and trends in social performance profile data reporting. MIX works with various partners to validate social performance data and provides resources like publications, videos, and a social performance resource center for MFIs.
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Measuring the social mission of microfinance
- 1. Microfinance Information Exchange Social Performance (SP) Reporting to MIX Micol Pistelli, Director of Social Performance, MIX December 2012 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. What is MIX? MIX Basics MFI Networks Donors and Investors MFI Regulators Raters 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. The challenge of finding the right balance 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. Criteria to define good SP indicators • Relevant Donors and MFI MFI Networks Regulators Investors • Easy to collect MFI MFI Networks • Can be verified by third parties Raters • Publicly available 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. MIX social performance indicators INDICATOR CATEGORY WHAT THE INDICATOR MEASURES 1. Mission and social goals MFI's stated commitment to its social mission, its target market and development objectives Whether the Board of Directors' members have been trained on social performance 2. Governance management and whether there is a formal Board committee that monitors social performance 3. Range of products and services Financial and non-financial products and services offered by an MFI 4. Client outreach by lending Typology of lending methodology offered by the MFI methodologies 5. Client retention Client retention rate of an MFI 6. Social responsibility to clients The Smart Campaign client protection principles 7. Transparency of costs of services How the institution states the interest rate to clients 8. Human resources and staff MFI's policy regarding social responsibility to staff, such as its human resources policy incentives in place, board and staff composition, staff turnover rate and staff incentives linked to social performance goals 9. Employment creation and Number of enterprises financed by the MFI and employment generation opportunities enterprises financed created by the enterprises financed 10. Social responsibility to the Whether the MFI has any policies and initiatives in place to mitigate environmental environment impacts of financed enterprises 11. Poverty outreach Poverty levels of clients at entry and their move out of poverty over time 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. MIX indicators align with SPTF standards 6 MIX UNDER indicators CONSTRUCTION ! 5 MIX indicators 9 MIX 2 MIX indicators indicators 3 MIX indicators 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. Process for reporting data to MIX There are 2 MIX forms for reporting social performance information: 1. A combined SP/FP excel form (to report annual performance data): downloadable at http://www.mixmarket.org/contribute-data 2. An online platform (to report policies, strategies and products): MFIs are given a username and password to access the platform and update their social performance information at any time If an MFI tracks poverty data, MIX sends a separate online poverty data questionnaire to report client poverty measurements Note: For MFIs with slow or intermittent internet connections, offline reporting options are available for every type of MIX data. 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. SP data validation 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. MIX’s SP data partners 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. SP profile data reporting trends . 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. Resources at your fingertips • Visit MIX’s Social Performance Resource Center to learn about additional resources on SPM and SP reporting: http://www.themix.org/social-performance • Read our publications: http://www.themix.org/social-performance/analysis • Watch our video on how to analyze social performance data: http://www.themix.org/social- performance/training-videos 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. MIX celebrates 10 years! 2002 - 2012 World 2000+ Class Top Online Premier Analytics Destination Insight MFIs Deepest Unique Dataset Scope 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. MIX global and project partners MIX partners with a dedicated group of industry leaders: 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. 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 Interested in learning more about MIX? Lima, Peru Sign up to receive our free e-mail Jirón León Velarde 333 Lince, Lima 14, Perú newsletters! Rabat, Morocco Immeuble CDG Place Moulay Hassan BP 408 Rabat Morocco Find us on Facebook Follow us on Twitter: @mix_market Hyderabad, India Road #12, Landmark Building, 5th Floor, Banjara Hills, Hyderabad 500034, India 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.
Editor's Notes
- Hello everyone, I would like to start off by thanking the SPTF for giving MIX the opportunity of presenting the 4 th module of the SP resource handbook on social performance reporting.
- In case any of you are unfamiliar with MIX, I’d like to spend a few moments talking about the organization that I work for. MIX is a non-profit organization headquartered in Washington, DC with regional offices in Azerbaijan, India, Morocco, and Peru. Committed to strengthening the microfinance sector by promoting transparency, MIX provides performance information on a number of institutions dedicated to serving the financial needs of poor and low-income clients. Our website, www.mixmarket.org, hosts more than 2,100 MFI profiles from over 110 countries. These MFI profiles in turn contain information on almost every aspect of an MFI’s operations.
- 10 years ago, when MIX was founded, microfinance practitioners were primarily focused on sustainability, growth and managing financial performance generally. As the industry expanded and evolved, reports of malpractice in the sector caused many to question whether MFIs were actually achieving their mission. Anecdotal evidence, all that was available at the time, was ineffective for properly monitoring and evaluating the social dimensions of MFI activities; the industry needed reliable indicators to effectively determine whether MFIs were acting in a social responsible manner and achieving their development goals.
- To overcome these challenges, the SPTF embarked on an effort to define a set of standardized social performance indicators that were relevant and easy to collect without forcing MFIs to undertake costly impact studies, and that could be verified by third parties and made publicly available on the MIX website.
- Over the course of several iterations, MIX and the SPTF created a suite of social performance indicators organized into 11 categories. These categories assess areas of mission, governance, internal systems, policies and products and client outreach, and all of them conform to the highest degree possible with the four indicator criteria mentioned previously. In this slide you can see a breakdown of what each category assesses. 10.12.12
- The indicators collected by MIX are already aligned with most of the new SPTF Universal Standards on Social Performance Management (USSPM). In this slide you can see how many indicators currently match each area of the standards. Nevertheless, some areas of the standards still need to be captured by an indicator and, between now and early 2013, MIX will work with the SPTF’s indicators working group to assess whether any new indicators will be included in MIX’s data collection for the year 2014.
- Social performance reporting to MIX is integrated into MIX’s normal data collection. There are 2 form for reporting data. One is a form to be filled out annually, which includes both social and financial performance data, and can be downloaded at our website using the link in the slide. MFIs report annual data related to staff and client retention rates, board and staff composition and client outreach using this form. The second way that MFIs report is through the MIX Online Profile Editor, where MFIs submit qualitative information related to their policies, strategies and products. This online platform can be used to update an MFI’s “profile” information any time the MFI wants to communicate a change in its operations (in other words, there is no yearly data collection cycle). An offline excel form, containing all of the same fields as the Profile Editor, is also available for those MFIs who cannot access the Online Profile Editor due to difficulties connecting to the internet. However we highly recommend that MFIs use the online version so that they can update and publish their information on MIX in as short a time as possible. Finally, MFIs that report tracking poverty data (via the Online Profile Editor) receive a separate survey to fill out in order to report client poverty measurements.
- Contrary to the financial performance data on MIX, the majority of social performance data points are self-reported. This is partially due to the fact that only 13% of the MFIs on MIX Market have a social rating. MIX is working to overcome the challenge of self-reported social performance data by setting up a validation system: an off-site desk review where MFIs are asked to share a series of original policy documents and/or studies carried out that confirm the existence of the indicators reported to MIX. MIX tested this procedure in 2011 and was able to validate 142 MFIs’ social performance indicators. MIX has been refining its validation system based on feedback from the SPTF’s Board and of a group of investors. The new methodology will be launched soon and MIX will be contacting networks and MFIs to collect validating documentation. Based on the documents received, MIX will recognize those MFIs that can provide complete social performance information with a means of validating the data reported by issuing personalized Certificates of Data Quality. These certificates which will be made available on individual MFI profile pages on MIX’s website. Soon, MIX users will also be able to visually distinguish and search for validated versus self-reported social performance data.
- MIX collaborates with major national and regional microfinance networks to collect its social performance indicators and validating documents. MIX works with all of the networks pictured here. These networks place a strong emphasis on proper social performance management and MIX could not have reached its impressive SP reporting figures without their support.
- When MIX started collecting SP indicators in 2009, only about 200 institutions reported. Today over 900 MFIs from across regions have reported their social performance information to MIX, all in just 4 years! Some regions, such as Latin America and the Caribbean (LAC), have been very active in reporting since the beginning. Here many MFIs were already prepared to report social performance information when MIX began collecting SP data. However, the other regions have done an impressive job in catching up on reporting, especially over the past year. Today, this global commitment to transparency on social performance information represents one of the best methods we have of ensuring that microfinance remains true to its social mission.
- A wealth of social performance data is now available at your fingertips and all of you—practitioners, donors, investors, and researchers alike—should find this information of use in making informed decisions about the performance of the microfinance industry overall as well as of individual organizations. However, MIX offers much more than just data and benchmarks on social performance. On our site you can also find a Social Performance Resource Center where you can read MIX’s analyses of social performance trends and practices, as well as watch training videos on how to analyze social performance data.
- Thank you for your attention, I hope you have found this presentation useful and I invite you all to explore the MIX website and make use of the social performance information available there.