social performance management (spm) - … performance management (spm) - what is it? - where did it...

Social Performance

Management (SPM) - What is it?

- Where did it come from?

- How does it Impact Credit Unions?

Partners Conference

Dublin, Ireland

September 18th 2014

Agenda

• Financial Institution Missions • Common Social Missions • Social Performance - Definition • Unbanked Opportunity • Microfinance Experience • Microfinance Crisis • Core Problem - NATO • Sector Reaction – Focus on SPM • Mature SPM Framework Example • ILCUF SPM Assessment Questionnaire • Q&A Discussion

ILCUF IPC September 2014 - SPM Workshop

Missions

• Banks ▫ Maximize profits / shareholder value

• Credit Unions ▫ Alleviate Poverty ▫ Help clients build livelihoods, improve

wellbeing ▫ Build democratic institutions with strong

common bond

• Microfinance Institutions ILCUF IPC September 2014 - SPM Workshop

Common Social Missions:

• Serving increasing

numbers of poorer and

more excluded people

sustainably

• Improving the quality &

appropriateness of

financial services

through assessment of

members’ needs

• Increasing members’

social capital, assets,

income, and access to

services

• Reducing members’

vulnerability

• Improving social

responsibility of the

institution toward

members, employees,

and communities


The Definition of Social Performance

• The effective translation of an institution’s

social mission into practice ▫ No Social Mission

▫ No Social Performance

▫ No Social Performance Management


Huge Market/Opportunity


Demand for many Products/Services

Financial literacy

Business Development

Services

Savings Micro Insurance


Big Problems?


What went Wrong ?

Commercial Mission Drift:

Fast growth (15-30% + p.a)

High competition

Market saturation

Coercive collection practices

Over-indebtedness …

Financial Mission Drift:

High return on investment

expected

Minimize costs, maximize profits

Fast profitability

Few products

IPOs …


Core Problem

• If you can’t measure it, you can’t manage it

• No Action Talk Only – NATO

• Social Performance Measurement

Backlash ▫ Donors

▫ Investors

▫ TA Advisors


• Client protection

• Development

standards, good

practices,

certification

• 7 principles

• 1 750 endorsers

from 120 countries

Responses of the Sector …

• Microfinance

Transparency

• Campaigns for fair

and transparent

pricing

• 28 countries

• More than 1000

different loan

products

• Seal of Excellence

for poverty outreach

and Transformation

in Microfinance

• To recognize those

institutions doing

the most to help

families lift

themselves out of

poverty

• Platform for dialogue,

learning and

collaboration

• Facilitating

engagement and

advocacy

• setting industry

standards for social

performance

management

• Promoting good

practices

• Gathering quality

evidence and research


Achieve Your Mission Through

Performance Management

Mission

Performance Management

Social

Performance

Financial

Performance


SP Assessment vs. SP Management

SPA

a measure of how well CU uses its

systems and operations to

generate social benefits

SPM the use of this

measure to make decisions


AMK Company Profile

• Largest number of borrowers in Cambodia : > 300,000

• Outreach to > 10,000 villages: > 70% of the villages in Cambodia

• Absolute Commitment to Mission: 50% of new clients in 2011 were

below the Cambodia Rural Food Poverty Line

• Leader in Social Performance Management and Responsible Finance

• Finance at Your Doorstep Methodology: Loan disbursement and

collection at community level

• Average Loan Size lowest of nationwide MFIs in Cambodia: USD 172;

94% of loans are for less than USD 300

• Lowest interest rates in the group lending market

Key Stats

• Population: 14.1 million

• GNI per capita, Atlas method: USD 750

• Poverty Level: 30%

Mature SPM Example – AMK Cambodia

AMK Client Profile

• 50% are below Poverty Line

• 87% of clients are female

• 63% of clients are literate, and 81% attended some school

• Average household has 5.2 persons including 3 income earners

• Clients are predominantly rural, but 63% of clients’ main source of cash

inflow is non-farm activity; 35% is farm activity

• Food is one of the top three expenditures for 96% of clients ILCUF IPC September 2014 - SPM Workshop

Levels of support for SP Assessement

• Purely self assessment: CU fills in questionnaire alone

• Accompanied self-assessment: CU with support from external reviewer

Reviewer knows the SPI well

• Self-assessment with external audit Auditor verifies the quality of the information

At least one day for external audit

• Purely external assessment: Done by external auditor


ILCUF SPM Assessment Questionnaire

- Outreach & Inclusion

- Member benefit & welfare

- Governance

- Responsibility to Staff & Volunteers

- Community & Environment

- Cooperation amongst Cooperatives


ILCUF Social Performance Assessment Questionnaire

Sample questions from the Excel based questionnaire.

Section 1: Outreach & Inclusion

Poverty Outreach Goals

Question: Does the credit union sets out and manages its poverty outreach goals?

The Credit Union chooses the most appropriate answer from these choices

•Less than 10% of members are classified as poor based on the poverty line or Apex Body Guidelines.

•More than 10% but less than 30% of members are classified as 'poor' based upon the poverty line or Apex Body Guidelines

•The percentage of poor members in your credit union is greater than the overall poverty level nationally as defined by the government or the Apex Body


Section 2: Member Benefit & Welfare

Savings Products

Question: Does the credit union actively offer a variety of savings products to meet its members needs?

The Credit Union chooses the most appropriate answer from these choices

•The credit union has only one single standard savings product

•The credit union offers several savings products, but staff are not clear about how or who to promote each product

•The credit union offers a variety of savings products and staff know about how each product can benefit individual members

ILCUF Social Performance Assessment Questionnaire

Sample questions from the Excel based questionnaire


CU Social Performance Assessement Results Basic Data on CU Date Established: 2001 Total membership: 1,340 Savings (Nov 2013): €56,000 Loan (Nov 2013) €44,000 • SPM Dimensions CU Score • 1) 25% Outreach & Targeting: 13% low • 2) 25% Member Benefit/Welfare: 7% very low • 3) 20% Governance: 5% low • 4) 10% Staff & Volunteers: 6% medium • 5) 10% Community & Environment: 5% low • 6) 10% Cooperation among Cooperatives: 8% high

100% Overall SPM Score: 44%


CU SP Assessement Results

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% Outreach & Targeting

Member Benefits

Governance

Environment

Responsibility to Staff & Community

Credit Union Movement Cooperation

Overall Social Performance


social performance management (spm) - … performance management (spm) - what is it? - where did it...

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