1. The document discusses putting the "social" back into performance management in microfinance by focusing on social performance and goals. 2. It presents a framework for social performance that includes intent and design, internal systems/activities, outputs, outcomes, and impacts. 3. Key aspects of social performance management are developing social goals and objectives, monitoring performance, and improving operations based on findings.

1. Putting the ‘Social’ into Performance Management in Microfinance Lalaine M. Joyas Microfinance Council of the Philippines, Inc. (MCPI) PACAP Microfinance Development Forum 30 January 2009

2. Broader context… Increasingly commercial approach to microfinance Professionalization of the sector Focus on social performance : Has it been lost ? Is it taken for granted ? Is there “mission drift ”?

3. Social Performance The effective translation of one’s social mission into practice, in line with accepted social values that relate to… reaching poorer and excluded clients; improving the lives of clients and their families; widening the range of opportunities for communities.

4. The SP Common Framework Context Country and regional development indicators (from secondary sources) Microfinance institution profile and financial services Process: Policies and Strategies Social performance management (SPM)—mission clarity; alignment of systems; decision making Social responsibility—to clients (SR-CL), including, where applicable, gender approach (GA), member governance (MG), non-financial services (NFS) to community (SR-Cm); to staff (SR-St); and to environment (SR-Env), from lenders to small enterprises Results: Achievement of Social Goals (SG) Outreach (SG-Or): Depth and breadth, may include hired (non-family) employment) Financial services (SG-Sv): Variety, appropriateness, and transparency Change (SG-Ch): Outcomes and impact

5. Social Performance Framework Intent and Design Internal Systems & Activities Output Outcome/Impact

6. Dimensions of Social Performance INTENT AND DESIGN What is the mission of the institution? Does it have clear social objectives? INTERNAL SYSTEMS & ACTIVITIES What activities will the institution undertake to achieve its social mission? Are systems designed and in place to achieve those objectives? OUTPUT Does the institution serve poor and very poor people? Are the products designed to meet their needs? OUTCOME Have clients experienced social and economic improvements? IMPACT Can these improvements be attributed to institutional activities?

7. Social Performance Pathway

8. Social Performance is defined in terms of both processes and results Translating mission into practice is a deliberate and intentional process Desired change in the lives of clients is the goal of this process and it is not automatic

9. Social Performance Management The process of translating mission into practice, including setting social objectives, tracking Social Performance, and using information to improve practice.

10. Developing social goals and objectives Monitoring and assessing performance Improving operations Social Performance Management Components

11. SMART Objectives S pec if ic M easurable A chievable R elevant T ime-bound

12. 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?

13. People’s Bank Case Study: Social Goals and Objectives In each of the next 3 years, reduce poverty level of clients and their families by moving at least 50% of clients up one level of the poverty scale Change in target clients’ lives: Improving their well-being Reduce client exit rate by 20% in the next 3 years Increase client satisfaction by 15% in the next 3 years Meeting target- client needs: Providing quality financial services In each of the next 3 years, deepen outreach of services to poor households, reaching at least 50% “poor” and 10% “very poor” among new clients Reaching target clients: Poor women and their families Social Objectives Social Goals

14. Developing social goals and objectives Monitoring and assessing performance Improving operations Social Performance Management Components

15. Information system Appropriate & cost effective information – fit for purpose? Progress out of Poverty Index (PPI) – integrated into MIS: Data from all clients/every loan cycle Segmentation and performance management

16. Developing social goals and objectives Monitoring and assessing performance Improving operations Social Performance Management Components

17. Social Performance Management …in practice Getting Started

18. Social Performance Management …in practice Aligning Strategy

19. Social Performance Management …in practice Aligning Management System

20. Social Performance Management …in practice Aligning Management System

21. Leadership and culture Does ‘passion for mission’ compensate for lack of systems? Organisational leadership and culture is key Commitment and leadership is not enough – needs to be systematised Many of partners have strong founder- leaders

22. Social Performance Management (SPM): …what are the benefits? and what are the costs?

23. Benefits… 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

24. Costs… The cost of what? Management processes Information systems Product development: (Health protection: $15,000) Mini-surveys: Costs part of operations Monitoring: Costs part of operations Market research (Health protection: $3,000) Impact assessments: $4,500; $20,000

25. Tools for Assessing Social Performance Intent and Design Internal systems/ activities Outputs Outcomes Impacts CERISE SPI MFC Social Audit SPA ACCION SOCIAL Planet Rating Triodos/GRI - TSF FMO E&S Risk Audit M-CRIL Microfinanza Rating CGAP/Ford/Grameen PPI USAID/IRIS PAT FINCA FCAT Oxfam Novib SEEP/AIMS tools Common Framework for Social Performance Assessment