1. Reporting Lessons Learnt Workshop 1 NAMMS Moscow 2012

2. Agenda Session 1. Presentation. The Status of Social Performance Management in Russian MFIs: Results from Social Reports Session 2. Presentation of “A survey of 405 MFIs reporting to MIX in 2009-2010” and Discussion. Identification of Advantages and Gaps of Russian MFIs from the Point of View of International Practices of Social Reporting Session 3. Discussion. “Quick Wins” for Russian MFIs Session 4. Working Group. Development of Individual Client- oriented Work Plans for the Competitive Social Performance Management for 2013 and Subsequent Years 2

3. Objectives of the Reporting Lessons Learnt Workshop 1. To understand the experience and opinion of MFIs on the process of SPS Reporting (after Session 1) 2. To understand by all MFIs and invited stakeholders what is the status of social performance in the country (Session 1) 3. To identify common gaps in social performance of MFIs and to brainstorm solutions for addressing these gaps (especially so called quick wins) (Sessions 1,2,3,4) 3

4. The Status of Social Performance Management in Russian MFIs: Results from Social Reports 1 NAMMS Moscow 2012

5. Sample Social performance status in the country (Country level report on SP results of participating in the project MFIs) is prepared for 16 MFIs, participants of the project The overall country level report on SP results with additional MFIs, not participating in the project, (around 10) will be prepared by September 5

6. What do the MFIs aim at in terms of social goals?

7. Target Markets

8. Development Objectives

9. Target Clients, by Income

10. What are the results of MFIs’ work in terms of achieving those goals?

11. Board Members Trained in SP

12. Formal Committee for Monitoring SP

13. Credit Products

14. Deposits and MFIs

15. Deposit Products

16. Compulsory Insurance and MFIs

17. Compulsory Insurance Products

18. Voluntary Insurance and MFIs

19. Voluntary Insurance Products

20. Other Financial Services

21. Enterprise Services and MFIs

22. Enterprise Services

23. Education Services and MFIs

24. Education Services

25. Health Services

26. Women's Empowerment Services and MFIs

27. Women's Empowerment Services

28. MFIs Meeting Certain Client Protection Principles (1/2) % MFIs meeting certain client protection principles: –The loan approval process requires evaluation of borrower repayment capacity and loan affordability. Loan approval does not rely solely on guarantees (whether peer guarantees, co-signers or collateral) as a substitute for good capacity analysis. 94% YES –Internal audits check household debt exposure, lending practices that violate procedures including unauthorized re-financing, multiple borrowers or co-signers per household, and other practices that could increase indebtedness. 94% YES –Productivity targets and incentive systems value portfolio quality at least as highly as other factors, such as disbursement or customer growth. Growth is rewarded only if portfolio quality is high. 94% YES –Prices, terms and conditions of all financial products are fully disclosed to the customer prior to sale, including interest charges, insurance premiums, minimum balances, all fees, penalties, linked products, third party fees, and whether these can change over time. 100% YES 28

29. MFIs Meeting Certain Client Protection Principles (2/2) % MFIs meeting certain client protection principles: –Staff is trained to communicate effectively with all customers, ensuring that they understand the product, the terms of the contract, their rights and obligations. Communications techniques address literacy limitations (e.g., reading contracts out loud, materials in local languages). 100% YES –Acceptable and unacceptable debt collection practices are clearly spelled out in a code of ethics, book of staff rules or debt collection manual. 69% YES –The organization's corporate culture values and rewards high standards of ethical behavior and customer service. 100% YES –A mechanism to handle customer complaints is in place, has dedicated staff resources, and is actively used. (Suggestion boxes alone are generally not adequate.) 75% YES –Customers know how their information will be used. Staff explains how data will be used and seeks permission for use. 94% YES 29

30. Transparency of Costs of Service to Clients

31. Human Resources Policy

32. Staff Incentives

33. Environmental Policies

34. 25% of MFIs follow environmental policies

35. MFIs Measuring Poverty % MFIs with poverty outreach as development objective ( 44% ) compared to % MFIs measuring poverty ( 50% )

36. MFIs Measuring Poverty

37. How much does the services and products offer fit into development objectives? GOOD RESULTS % MFIs with poverty outreach (poverty reduction) as development objective (44%) compared to % MFIs measuring poverty (50%) -> good % MFIs with gender equality and women's empowerment as development objective (6%) compared to % MFIs offering women's empowerment services (12%) -> good % MFIs with improvement of adult education as development objective (31%) compared to % MFIs offering financial literacy education (88% of MFIs offering education services (50%) => 44%) -> good 37

38. How much does the services and products offer fit into development objectives? GAPS % MFIs with development of start-up enterprises (as development objective (81%) and growth of existing businesses (81%) compared to % MFIs offering enterprise services (44%) -> gap % MFIs with youth opportunities (50%) and children's schooling (25%) as development objective compared to % MFIs offering child and youth education (38% of MFIs offering education services (50%) => 19%) -> gap % MFIs with health improvement (19%) and water and sanitation (6%) as development objective compared to % MFIs offering basic health/nutrition education (0%) and having environmental policies (0%) -> gap 38

39. Members Commitment and Project’s Results (1/2) # of MFIs who participated in the Awareness raising workshop & SP Reporting Training: 21 MFIs # of MFIs committed to submitting SPS report initially: 16 MFIs # and % of MFIs which submitted SPS report (real commitment): 16 MFIs, participants of the project, (100%) # and % of SP reports which required corrections: 4 MFIs (25%) # and % of SP reports ready to be sent to MIX (quality): 16 MFIs, participants of the project, (100%) are going to be sent on June 15, 2012 # and % of financial reports ready to be sent to MIX (quality): 8 MFIs, participants of the project, (50%). Reason for the delay: auditing process of financial statements till July. NAMMS/RMC request: “Please, send it to us as soon as possible” 39

40. Members Commitment and Project’s Results (2/2) Project targets achieved: Risen awareness of SP activities among 21 MFIs’ members – Done  Forum “Social business in Russia” (October 2011)  X National Conference on Microfinance in Russia “New Decade, New Challenges: Regulation as a Driver of Development” (November 2012)  Awareness raising workshop and SPM presentations during the Xth National Conference on Microfinance in Russia “New Decade, New Challenges: Regulation as a Driver of Development” (November 2012)  Annual meeting of NAMMS (Moscow, February 2012)  Awareness raising workshop & SP Reporting Training (February 2012 and March 2012)  Video conference “Reporting practices and Microfinance Investors: New Questions, New Role” (February 2012)  Press conference for Award “Social Entrepreneur – 2012” (March 2012)  Private discussions with stakeholders (on-going base) Increased number of NAMMS members (at least 16) that start implementing (14 new MFIs) and widen a scope of implemented SPM activities (2 MFIs). Increased number of reporting MFIs to MIX (14 new MFIs and two with widen scope) – Done At least developed one case study on SP activities, implemented by MFIs – to be done (identify volunteers after Session 4) SP scale up plan developed – to be done (starting with Session 4) SP analysis at country level developed: –Social performance status in the country (Country level report on SP results of participating in the project MFIs) is prepared for 16 MFIs, participants of the project, – Done in presentation form, presented on the Project lessons learnt workshop –The overall country level report on SP results with additional MFIs, not participating in the project, (around 10) will be prepared by September 40

41. Feedback Collection Discussion of the following issues: a. What do you think about the process of reporting? b. What was easy for you in reporting? What was difficult? c. What are the challenges you face in reporting and how can the network (NAMMS) address it? d. How beneficial is the process of SPS Reporting to you? 41

42. With support from Microfinance Centre Tel.: +48 22 622 34 65 Fax: +48 22 622 34 85 www.mfc.org.pl SPFund@mfc.org.pl Thank you! NAMMS/RMC Tel./Fax: +7 (495) 258-8705, +7 (495) 258-6831, +7 (495) 258-8709 info@rmcenter.ru nbabachenko@rmcenter.com