kiva cerise spi feb2010 intro spi(day1&2)
TRANSCRIPT
Introduction to the Social
Performance Indicators (SPI)
tool
Overview
1. Background to the SPI
2. The SPI in a nutshell
3. SPI and SPM
Objective
Familiarize participants with the SPI and its use as a
Social Performance Assessment tool and entry
point to Social Performance Management
1. Background to SPI
Background to SPI
90’s: Emphasis was on financial performance,
little attention for social performance
First discussions in 2001 (CERISE & partner
MFIs): Microfinance and social links
A need to improve accountability + visibility for
social performance, in order to promote
microfinance’s core priority.
Development process
But, no tools!
Background to SPI
Development process of SPI initiative SPI 1 (2001 – 2003) - Conceptual framework (research and practitionners)
- SPI tool version 1
SPI 2 (2004 – 2005) - Field testing: 25 MFIs in different contexts
- SPI version 2 and operational guide
SPI 3 (2006 – 2009) - Promotion of SP, association with SPTF
- SPI version 3 compatible with MIX SPS
SPI4 (2009 – 2011)
SPI for the investors
Work with MFIs to innovate and improve practices: rural finance, new products, savings, consumer protection, client surveys, MIS
Background to SPI
Most recent version of SPI (3.1)
Fully compatible with Social Performance
Standards reported to MIX
Includes indicators on social responsibility to
the environnement, interest rates, consumer
protection principles
Who uses SPI?
Background to SPI
MFIs
> 250 SPI audits in CERISE/ProsperA database
MFI Networks
Benchmarking SP,
standardized reporting, MIS
Social Investors
way to dialogue with
partners, raise
awareness of SP
Foro Lac Fr, RFR,
Finrural, CIF,
Consortium
Alafia…
Oikocredit, Kiva,
AFD, Sidi,
Grameen-Crédit
Agricole…
2. The SPI in a nutshell
A questionnaire
Self-administered by MFI or done by external auditor
Participatory or centralized approach
Graphical results; possibility of review by external auditor
An operational guide to accompany questionnaire
Methodology to conduct the social audit
Rationale for each of the indicators
Sources of information
=> Available on line www.cerise-microfinance.org
What is it?
The SPI tool
1. SPI Layout
Two documents
Questionnaire Operational Guide
Audit methodology
Rationale
Definition/Examples
Guidelines
Information sources
Part 1: Basic details
Part 2: Indicators (4 dimensions)
Audits the internal processes the MFI has in place for reaching its social mission.
Intent
What is the MFI’s mission? Does it have clear social objectives?
Internal systems and activities
Are they in place to help achieve objectives?
Outputs
Does the MFI know whether it’s reaching target clients?
Outcomes
Does the MFI know whether its clients have seen improvement?
What does it do?
The SPI tool
NOT
IMPACT
ANALYSIS!
Intent Internal
systems/activities
Outputs Outcomes
Part One: Description of MFI, Context, Social Strategy, Financial performance
Part Two: 70 Social Performance Indicators
Dimension 1: Targeting and Outreach
Dimension 2: Products and Services
Dimension 3: Benefits to Clients
Dimension 4: Social Responsibility
Each dimension is broken down into three criteria
Content of Questionnaire
The SPI tool
The SPI tool
Questionnaire – Part Two
Dimension 1: Targeting and Outreach
Selection of operating
zones
Client selection devices that
favour poor and excluded people
Services characteristics that
facilitate access of the poors
and excluded
Geographic
Individual
Pro-poor methods
Questionnaire – Part Two
Dimension 2: Products and Services
Diversity of credit,
voluntary savings
Decentralization, rapidity,
transparency, drop-outs
Direct or through
partnership: transfers,
mobile banking, fin ed
Range of services
Quality of services
Innovative and non
financial services
The SPI tool
Questionnaire – Part Two
Dimension 3: Benefits to clients
Tracking changes, impact
studies, profit-sharing
Level and quality of
participation
Group formation,
collective management,
client advocacy
Economic benefits
Client participation
Social capital/client
empowerment
The SPI tool
Questionnaire – Part Two
Dimension 4: Social Responsibility
Salary scale, training,
participation in decisions,
turn-over
Consumer protection
Respect of local culture,
local development,
environmental protection
To employees
To clients
To the community
and environment
The SPI tool
The SPI tool
Dimension 1: Targeting & Outreach
Criteria 1: Geographic targetingevaluates how MFI selects operating areas
1.5 Does the MFI have regular service points located in areas where there
are no other MFIs or bank branches?
0= No branch or less than 5%
1= Yes, less than 30 % of the branches
2= Yes, more than 30% of the branches
The SPI tool
Dimension 1: Targeting & Outreach
Criteria 2: Individual targetingevaluates how MFI selects clients
1.6 Does the MFI use a targeting tool to select poor clients?
0= for less than 10% of new clients over the last year
1= for less than 50% of new clients over the last year
2= for more than 50% of new clients over the last year
The SPI tool
Dimension 1: Targeting & Outreach
Criteria 3: Pro-poor methodologyEvaluates design of services that target the poor or
excluded
1.14 Does the MFI provide small loans (≤ 30% GNI per capita) to facilitate
access for the poor?
0 = small loans < 30% of the total number of active clients
1 = small loans < 50% of the total number of active clients
2= small loans ≥ 50% of the total number of active clients
The SPI tool
Dimension 2: Products & Services
Criteria 1: Range of servicesEvaluates diversity of product mix
2.3 Does the MFI provide loan products specifically tailored to clients’ social
needs?
0 = No specific loan products
1 = One or more specific loan product
The SPI tool
Dimension 2: Products & Services
Criteria 2: Quality of servicesEvaluates quality using objective & verifiable proxies
2.12 What percentage of clients dropped out of the MFI during the last
accounting year?
0 = More than 30%
1 = 15-30%
2 = Less than 15%
The SPI tool
Dimension 2: Products & Services
Criteria 3: Innovative and non financial
servicesEvaluates efforts to innovate/ go beyond strict
financial services
2.18 Does the MFI (or partnering institution) offer services that address
social needs?
0 = No
1 = Yes
The SPI tool
Dimension 3: Benefits to clients
Criteria 1: Economic benefitsEvaluates efforts to promote and measure
improvement in clients’ economic sitation
3.1 Does the MFI track changes in the poverty levels or economic status of
clients over time?
0 = No information collected on changes to the economic status of clients
or only anecdotal evidence of changes
1= Regular monitoring of changes to the economic status of clients
The SPI tool
Dimension 3: Benefits to clients
Criteria 2: Client participationEvaluates to what extent clients are involved in
decision making
3.9 Are elected client representatives involved at the management level?
0 = No
1 = Yes
The SPI tool
Dimension 3: Benefits to clients
Criteria 3: Social capitalEvaluates MFI actions to reinforce clients’ social ties
3.15 Does the MFI or partnering institution offer support services that
specifically aim at women’s empowerment ?
0 = No/offers services for women but none that aim at empowerment
1= Yes, offers one or two products/services designed for women with a
“transformative objective”
2= Yes, offers more than two products/services designed for women with a
“transformative objective”
The SPI tool
Dimension 4: Social Responsability
Criteria 1: SR to employeesEvaluates working conditions
4.2 What percentage of staff is employed with a long-term contract?
0 = less than 40 %
1 = more than 60 %
2 = more than 80 %
The SPI tool
Dimension 4: Social Responsability
Criteria 2: SR to clientsEvaluates the six principles of consumer protection
4.8 Prevention of over-indebtedness: What does the MFI do to avoid client
over-indebtedness
0 = Nothing in particular
1 = Some efforts made
2 = Efforts made to prevent over-indebtedness and measures have been
taken after identification of over-indebtedness
The SPI tool
Dimension 4: Social Responsability
Criteria 3: SR to the community and
environmentEvaluates MFI’s contributions to local economic,
social and cultural development as well as
environmental protection
4.15 Does the MFI have a policy defining social responsibilities to the
community?
0 = No, Policy under development or planned
1 = Informal policy reflected in operations
2 = Yes, a formal, written policy
Question format
The SPI tool
1.5 Does the MFI have regular service points located in areas where there are no
other MFIs or bank branches?
Definitions: A regular service point includes MFI branches, mobile banking agencies or
delivery devices operating at least one day a week. An area is considered to have no other
MFI or bank branches when a service point is located at least 50 km (or more than 2 hours)
away.
0= No branch or less than 5%
1= Yes, less than 30 % of the branches
2= Yes, more than 30% of the branches Please specify:
Number of clients served in these areas: _______________
Number of service points in areas without other banks/MFIs: _____
Percentage of clients served in these areas
Percentage of service points in these areas: ______
SPS 11b-f
Internal self-assessment or external audit
Centralized (top management) or
participatory approach (different
stakeholders and levels of the MFI)
1-3 day process (centralized) / 4-6 day
(participatory)
The SPI tool
Methodological options
Simple
Why use the SPI?
The SPI tool
Results presented in
radar and diamond
graphs
Easy to analyze
Standardized results Compatible with SPS
Peer group analysis
Quick & easy to apply;
easy to verify
Example of results: participatory MFI
Context and strategies
• Rural, women business sector
• Mature MFI
•Previous crises in MF sector
(over indebtedness, mission drift)
pushed social agenda forward
SPI results
•Strong and balanced
performance
•Range of services and
transparency can be
improved
The SPI tool
Context and strategies
• Mainly urban sector
• Urban and mainly commercial
approach
SPI results
• Clear focus on services
• Good SR towards staff
• Weak targeting and SR
• Client participation is not in
the MFI model
Example of results: urban MFI
The SPI tool
3. SPI and SPM
SPI as a diagnostic tool
SPI as a management tool
SPI as a communication tool
SPI and SPM
SPI as an entry point to SPM
1. Setting clear social objectives and strategy
2. Monitoring progress in meeting these
objectives
3. Using social performance information to
make decisions
Social Performance Management
Three main components
Data collection and use of information
is at the heart of SPM
SPI as a diagnostic tool
Gives an overview on social performance for the MFI,
strengths and weaknesses
Help identify priorities for the MFI to improve SP
Identifies key criteria to be followed
Serves a basis for an internal control system (“social
dashboard” or social scorecard)
SPI and SPM
SPI as a management tool
SPI and SPM
Once identifying priority areas with the SPI, the SPI can
be combined with other tools to address them
An MFI wants to…
Understand high drop-out rates
Expand outreach to the very poor
Verify decision making processes to
integrate SP data
Understand/ Improve overall SP or
avoid mission drift
Market research
PPI/PAT
Governance analysis
Internal social audit (ex.: SPI)
SPM Tool
The SPI promotes transparent communication within MFI
(Board, general assembly, etc.), with investors, clients, the
sector, authorities and the general public
Consistent results, easy to prepare reports and briefs
Showcases good practices, highlights efforts to improve
Creates a common language on social aspects of
microfinance and contributes to benchmarks
SPI as a communication tool
SPI and SPM
Good SPM hinges on effective communication of the social
performance agenda to all stakeholders
For investors, the SPI is also…SPI and SPM
A diagnostic tool
A governance &
management tool
A communication tool
Does the MFI reflect the investor’s
own values?
Id’s priorities for managing relationships with MFIs & reduces investment risks
through better knowledge of partners / potential capacity
building
between MFI-investor, between
investors-sharesholders, among
investors
Working groups:
Filling up the SPI questionnaire
Rules of the working groups
1. In each group, one person represents a MFI
2. Fill in the SPI questionnaire, with the help of the operational guide
3. Please note any question you have regarding the indicators.
Part One: [half an hour to one hour]
Each dimension: [1/2 hour to one hour]
Objective: a completed SPI questionnaire at the end of the session!
Results of the Exercise
Clarifying questions on the SPI
tool/dimensions/criteria/indicators/use of
the operational guide
Discussing the graphs and use of the SPI
tool