Beirut - May 2009 Social Performance Task Force Indicators Micol Pistelli Manager, Social Performance Standards Sanabel 6 th Annual Conference MIX –Microfinance Information Exchange

MIX - OUR MISSION To support the growth of the microfinance industry through a world-class public information platform

MIX delivers Standards Data Analysis  The authoritative voice on definitions and selection of core indicators for microfinance data analysis  The leader in fundamental MFI company data  An independent source – no other business interest  The researcher’s choice for MFI performance benchmarks and global, regional analysis Company data – on MFIs, Investors & Fund Managers MFI performance data – individual and in aggregate Consulting – portfolio benchmarking services Training – financial & operational reporting Leadership – performance standards Through

Measuring the double-bottom line Measuring financial performance is a natural piece of any organization’s self-evaluation and goal setting, and the measures of such performance have been pretty well defined. But what about Social Performance metrics?

Why is social performance important? Social indicators allow for a more holistic assessment of microfinance institutions It provides evidence about MFIs performance in outreaching the poor Social performance can even out information imbalance so that programs with excellent social benefits can receive recognition and support from donors and social investors Greater focus on SPM eventually results in better actual social performance, in reaching larger number of poor people, in improving services to clients and in positively contributing in the community where MFIs operate ……Once recognized its importance, how can we measure it?

The Social Performance Task Force: composition, role and objectives Year of formation: 2005 Composition: NGOs, Donors, Social Investors, Networks/Associations, Microfinance Raters, Action research programs/universities Objectives: clearly define social performance and address questions about measuring and managing social performance. For more info about the SPTF, visit:

The Task Force Social performance Standards Subcommittee Goal: Developing ways to measure social performance through a framework of comparable, standardized data analogous to the financial performance framework Indicators had to be: relevant, easy for the MFI to obtain, easy to verify, not confidential for the MFI

MIX’s Social Performance Standards Program: the agenda Lead the process of creation of a common reporting format for SP indicators that can be standardized and reported globally Collect data on SPS from MFIs and make them available to the public through MIX Market Improve SP benchmarks for MFIs. These benchmarks will also be integrated into the MicroBanking Bulletin Disseminate and promote information sharing and news about SPS through MIX website and the SPTF blog

MIX’s Social Performance Standards Program: Work up to date Completed a survey of MFIs responses to a draft set of SP indicators undertaken on behalf of the SPTF, getting responses from 57 of 104 MFIs invited to participate (May 2008) Presented the survey’s results at the SPTF’s annual meeting in Paris in June 2008 and received the SPTF’ approval to use the survey’s indicators as the official standard questions going forward Took charge of the SPTF’s committee on SPI reporting, to start the coordination process and move development along Created a new SPS reporting format in Excel, refined questions, included recommendations from the SPTF, provided new definitions to indicators, and created a glossary Sent the SPS reporting format in English, Spanish and French to the MFIs already reporting their financial indicators to the MIX (February 2009) Started to publish the SPS report on MIX website (April 2009)

Social Performance Indicators Framework Outreach Q11- Geographic outreach Q12- Women outreach Q13- Clients outreach by lending methodology Q1–Mission & Social Goals Q2- Governance Q3–Range of Products and Services (financial & non-financial) Q4–Training of staff on social performance Q5–Staff performance appraisal and incentives Q6–Market research on clients Q7–Measuring client retention Q14–Poverty assessment Q8– Social responsibility to clients Q9-Cost of services to clients Q10–Social responsibility to staff Q15 – Social responsibility to the community Q16–Social responsibility to the environment Intent Strategies & Systems Policies & Compliance Achievement of social goals [ PROCESS ] [ RESULTS ] Outputs and outcomes Q17-Products Q18–Employment (Family & Hired in credit supported ents.) Q19–Children in School (girls/boys) Q20–Poor and very poor clients Q21–Clients in poverty Q22–Clients out of poverty Intent Internal systems/activities OutputsOutcomes Impact Indicators MFIs that want to update their profile on MIX Market with the social performance indicators are expected to be able to report information on the 13 indicators contained in Part I of the report (indicators highlighted in red)

The four dimension of social performance: First - INTENT STANDARDEXAMPLE OF QUESTIONS Mission and social goals - What is the poverty level of the clients that your institution aims to reach? -What is the target market of your institution? - Which development objectives does your institution specifically pursue? Governance -Are Board members' responsibilities and terms of services specified by the Institution's bylaws? --How is your institution's Board composed? --What are the areas of expertise of your institution's Board members? --How does your institution reinforce Board members’ knowledge of, and commitment to, social performance?

Data based on the first 50 MFIs reporting to MIX Some data from the MFIs reporting on the SPS Report

Regional representation Data based on the first 50 MFIs reporting to MIX

Second dimension: STRATEGIES AND SYSTEMS Range of products and services -Which financial products/services does your institution offer? - Which non-financial services does your institution offer? Training on social performance -Did any of your staff participate in training or orientation sessions related to any aspect of social performance management? -On which areas related to social performance does your institution offer staff training? Staff performance appraisal and incentives -Does your institution conduct performance appraisals of staff in relation to social performance management? -Does your institution have in place a staff incentives scheme related to social performance goals? Market research on clients -Does your institution use market research to identify the needs of clients and potential clients? Measuring client retention -How often does your institution conduct or commission exit surveys or receive informal feedback from exiting clients? Poverty assessment - Which methods – if any - does your institution use to measure the poverty levels of your entering/recently joined clients?-Does your institution track changes in the poverty levels of your clients over time? STANDARDEXAMPLE OF QUESTIONS

Data based on the first 50 MFIs reporting to MIX

Third dimension: POLICIES AND COMPLIANCE Social responsibility to clients -What does your institution do to avoid client over-indebtedness? -How does your institution ensure transparent communication with clients about prices, terms and conditions of financial products? Cost of services to clients - What is the main loan product that your institution offer? -What percentage of the portfolio does it represent? – EIR calculation Social responsibility to staff -Which policies are included in your human resources policy? - What policies does your institution have in place to support women staff? – Staff turnover rate Social responsibility to community -Does your institution have a policy for social responsibility to the community? Social responsibility to environment -Does your institution have a policy for social responsibility to the environment directed at supported enterprises? STANDARDEXAMPLE OF QUESTIONS

Fourth dimension: ACHIEVEMENT OF SOCIAL GOALS STANDARDEXAMPLE OF QUESTIONS Geographic outreach - What is the clients coverage in each geographic area -Does your institution have regular service points located in areas where there are no other MFIs or bank branches? Women outreach - Number and percentage of women clients Clients outreach -Clients outreach by lending methodology -percentage of clients who have graduated from group loans Outputs - Did you conduct any study regarding the effectiveness on your target market of the financial/and or non-financial products and services that you provide? Employment Number of enterprises financed and employment generation Children in School -Do you track whether your clients' children are attending school ? Poor and very poor clients at entry -What poverty line(s) does your institution consider when measuring the poverty levels of your entering/recently joined clients? Clients in poverty Of your clients who have been with your institution for 3 or 5 years, what percentage is estimated to be below the poverty line? Clients out of poverty Of your clients who have been with your institution for 3 or 5 years, what percentage is estimated to be above the poverty line now?

MIX next steps on social performance for the year Participation at the SPTF Meeting in Madrid -Goals of the meeting: Hear the voice of the MFIs and networks about the process of data reporting; address issues regarding improvement of MFIs’ MIS; assess areas of social performance where MFIs need more technical assistance; define a clear process for SP data validation - Launch of the SPTF Blog on social performance indicators - Goals: create a platform of information, analysis and exchange of experience and best practices about social performance management of the MFIs reporting their data to MIX - Implementation of MIX Market 2.0 -Goals: integrate social performance data into the new MIX Market website which will allow to automatically display SP data from MFIs; create a database with country data regarding social performance to serve as a background for the data reported by each MFI

Thank you! For any question about MIX Social Performance Standards Program please contact: Web: Headquarters: 1901 Pennsylvania Ave., NW, Suite 307 Washington, D.C USA Other Locations Lima, Peru ● Dakar, Senegal ● Guragon, India ● Jakarta, Indonesia

Our core supporter today MIX Social Performance Standards Program is carried out through the generous support of: