UNIVERSAL STANDARDS FOR SOCIAL PERFORMANCE MANAGEMENT AT BOLIVIAN MICROFINANCE SECTOR By PROFIN Foundation, for SPTF Networks Meeting, Panama, June 2013

Founded in Bolivia in 2006, after 10 years of experience as program of SDC and DANIDA. PROFIN´s main activity has been the financial innovation for productive sector. Social performance is part of the institutional strengthening interventions of MFIs, for which PROFIN gives technical support since Founded in Bolivia in 2006, after 10 years of experience as program of SDC and DANIDA. PROFIN´s main activity has been the financial innovation for productive sector. Social performance is part of the institutional strengthening interventions of MFIs, for which PROFIN gives technical support since FINANCIAL AND PRODUCTIVE SECTOR SUPPORTING FOUNDATION PROFIN made the 1rst. implementation of SPI social audit in Bolivian Microfinance Sector, in Constantly, PROFIN has worked supporting the Social Performance Assessment and Social Performance Management of MFIs. In 2013, PROFIN has finished a study about baseline situation of Universal Standards in Bolivian Microfinance Sector. PROFIN made the 1rst. implementation of SPI social audit in Bolivian Microfinance Sector, in Constantly, PROFIN has worked supporting the Social Performance Assessment and Social Performance Management of MFIs. In 2013, PROFIN has finished a study about baseline situation of Universal Standards in Bolivian Microfinance Sector. 2

SELF ASSESSMENT OF COMPLIANCE WITH UNIVERSAL STANDARDS TO MAKE TO MAKE TO MAKE KNOW TO MAKE KNOW TO IMPROVE TO IMPROVE TO KNOW TO KNOW AWARENESS- RAISING AND CONTEXTUALIZATION WORKSHOP PROFIN´S STRATEGY REGARDING UNIVERSAL STANDARDS 3 REPORT THE STATE OF SITUATION OF UNIVERSAL STANDARDS: A PUBLIC SECTORIAL REPORT AND A CONFIDENTIAL INDIVIDUAL REPORT TECHNICAL SUPPORT FOR IMPROVE THE IMPLEMENTATION OF UNIVERSAL STANDARDS

TO KNOW 4 PROFIN conducts a workshop for each IMF, representatives of Board of Directors and employees participate PROFIN gives to each MFI the workshop material for internal use PROFIN invites to IMFs to participate in the process SCOPE OF THE WORKSHOP 1. Conceptual Framework of Social Performance 2. International Initiatives SPM approach of Imp-Act Consortium Social Audit and Social Rating Market Research and Poverty Measurement Responsible Finance Universal Standards and Social Performance Indicators 3. Local Initiatives Networks initiatives: ASOFIN y FINRURAL Sectorial initiatives: PROFIN Foundation Social Performance in new Financial Services Law.

TO MAKE PROFIN gives to each MFI a self assessment questionnaire of Standards compliance 5 PROFIN fixes a rating scale of the answers 0 = null compliance 1= low compliance 2= median compliance 3=high compliance 4=total compliance PROFIN fixes a rating scale of the answers 0 = null compliance 1= low compliance 2= median compliance 3=high compliance 4=total compliance PROFIN identifies the current percentage of compliance STANDARD 5C. THE INSTITUTION MONITORS EMPLOYEE SATISFACTION AND TURN-OVER ESSENTIAL PRACTICES COMPLIANCE NullLowMedianHighTotal 5C.1 The organization gathers, documents, and analyzes employee satisfaction data X 5C.2 The institution monitors the rate of employee turnover and understands the reasons for employee exit x 5C.3 The institution takes action to correct institutional problems leading to employee turn-over and dissatisfaction x 5C. Monitor of the employee satisfaction and turn-over Maximum value Current value % 12975% 5C.1 know information about the employee satisfaction4250% 5C.2 Monitor the employee exit causes and turn-over rate4375% 5C.3 Correct the employee dissatisfaction causes and turn-over4125%

TO MAKE KNOW 6 PROFIN generates a sectorial report with average results of MFIs (public report) AVERAGE COMPLIANCE WITH THE STANDARDS 1A. Strategy for reach social goals80% 1B. Collection, report and quality of social performance information 71% 2A. Committed of the Board of Directors with the social mission 87% 2B. Support of Board of Directors for accountability of social performance 80% 2C. Involvement of senior management with social strategy76% 2D. Social Performance in recruiting, evaluation and recognized of the employees 70% 3A Prevention of over-indebtedness88% 3B. Transparency in the information provided to customers85% 3C. Fair and respectful treatment of clients73% 3D. Privacy and security of client data84% 3E Mechanisms for complaint resolution70% 4A. Understand clients’ needs and Preferences73% 4B. Appropriate product design and delivery88% 4C. Design of products and services targets to generate benefits for clients 79% 5A. Supportive working environment and Human Resources policy 81% 5B. Transparency in employment terms and training for employees 85% 5C. Monitor of employee´s satisfaction and turn-over78% 6A. Appropriate and sustainable growth rates86% 6B. Appropriate financing structure82% 6C. Responsible pricing84% 6D. Appropriate compensation to senior managers90%

TO MAKE KNOW (2) 7 PROFIN generates a report for each MFI (a confidential report) PROFIN identifies gaps of 100% compliance and the prioritization of improvements Sections of Social Performance Management Sectorial average Compliance MFI Compliance Gap of 100% compliance Prioritization of improvements 1. Define and Monitor Social Goals 75%19% -81%1 2. Ensure Board, Management, and Employee Commitment to Social Goals 76%49%-51%2 3. Treat Clients Responsibly81%70%-30%4 4. Design Products, Services, Delivery Models and Channels That Meet Clients’ Needs and Preferences 83%75% -25%5 5. Treat Employees Responsibly81% -19%6 6. Balance Financial and Social Performance84%64%-36%3 In the example, the MFI should prioritize the social strategy definition and the social goals monitoring (gaps= -81% and -51%)

PROFIN´S THECNICAL SUPPORT FOR SOCIAL PERFORMANCE MANAGEMENT STRENGTHENING GOVERNANCE STRENGTHENING GOVERNANCE INFORMATION SYSTEM FOR SOCIAL PERFOMANCE MANAGEMENT INFORMATION SYSTEM FOR SOCIAL PERFOMANCE MANAGEMENT TO IMPROVE SECTION 1: DEFINE AND MONITOR SOCIAL GOALS SECTION 1: DEFINE AND MONITOR SOCIAL GOALS ESTRATEGY PLANNING WITH SOCIAL DIMENTION ESTRATEGY PLANNING WITH SOCIAL DIMENTION SECTION 2: ENSURE BOARD, MANAGEMENT, AND EMPLOYEE COMMITMENT TO SOCIAL GOALS SECTION 2: ENSURE BOARD, MANAGEMENT, AND EMPLOYEE COMMITMENT TO SOCIAL GOALS FINANCIAL INNOVATION PROCCESS WITH DEMAND APPROACH FINANCIAL INNOVATION PROCCESS WITH DEMAND APPROACH SECTION 3: APPROPRIATE DESIGN OF PRODUCTS, SERVICES, DELIVERY MODELS AND CHANNELS SECTION 3: APPROPRIATE DESIGN OF PRODUCTS, SERVICES, DELIVERY MODELS AND CHANNELS STRENGTHENING SOCIAL RESPONSABILITY STRENGTHENING SOCIAL RESPONSABILITY SECTIONS 3 AND 5: TREAT CLIENTS AND EMPLOYEES RESPONSIBLY SECTIONS 3 AND 5: TREAT CLIENTS AND EMPLOYEES RESPONSIBLY 8

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