FULL TITLE: Learning to Cost-Effectively Assess and Manage Social Performance ROOM: Impala/Lake Turkana FACILITATED BY: Freedom from Hunger Mr. Christian Loupeda (USA)

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. OVERVIEW
•Rationale, Background and
Concepts
•Managing and Assessing Social
Performance
•Some Resources

3. Rationale, Background
Concepts

4. Double bottom line attraction
What does this mean?

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

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. 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. Social value/social returns in microfinance?
Do we see it clearly ?

9. Social concerns
Lack of clarity
(mission, social responsibility)
Mission drift
Reputation risk

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. 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. 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;

14. 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

15. 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

16. First task for the Social Performance Task Force
• To agree a definition for Social Performance

17. What is Social Performance?
The effective translation of an institution’s
mission into practice
in line with
accepted social values
Mission
Values

18. Social Performance Pathway
• About process and results – the steps to achieve impact:
MISSION
Intent Operations Results
IMPACT

19. 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?

20. 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

21. Managing and Assessing Social
Performance

22. 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

23. FOUR MINI CASE STUDIES
Key lessons learned:
• Information
• Clarity
• Adjusting systems
• Integrating into management
• Everything contributes – organisational culture

24. 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?

25. 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!

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

27. Social Performance Management

28. 2.3a
Social Performance Management
Components
1. Developing social goals and objectives
2. Monitoring and assessing performance
3. Improving operations

29. 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?

30. 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

31. 2.3a
Social Performance Management
Components
1. Developing social goals and objectives
2. Monitoring and assessing performance
3. Improving operations

32. 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

33. 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

34. 2.3a
Social Performance Management
Components
1. Developing social goals and objectives
2. Monitoring and assessing performance
3. Improving operations

35. 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

36. 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

37. 2.2c
Social Performance Pathway:
Strategy and Operations
• Goals
• System use
• Objectives
• Service delivery
• Range of products
• Human resources
and services

38. 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?

39. 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

40. 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

41. Tools and Strategies for Social
Performance, include:

42. …And…

43. 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) ?

45. Some Resources

46. 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

47. 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

48. CGAP
www.cgap.org/portal/
• Focus Note #41 May 2007
Beyond Good Intentions: Measuring the Social Performance of Microfinance
Institutions

49. The MiX
http://www.themix.org/standards/social-performance

50. Social Performance Task Force
http://www.sptf.info/

51. 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

52. 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.

53. www.microfinancegateway.org
Library
Hot topic
Fundamentals
Overview
Glossary
Web Resource Guide
FAQs
Tools
4

54. What Do We Do Next?
• Let‟s take few minutes to reflect on what to do
next…

55. Thank You!
Please do be in touch
cloupeda@freedomfromhunger.org