1. JUNE 2009 Presented by: Emmanuelle Javoy, Managing Director Social Performance Task Force – Madrid 2009 Social Performance Ratings Planet Rating 13 rue Dieumegard 93400 Saint Ouen France Tél : 33 1 49 21 26 30 – Fax : 33 1 49 21 26 27 contact@planetrating.com - www.planetrating.com

2. 1 June 2009 – SPTF in Madrid – Social Performance Ratings Planet Rating - What do we rate? Our Social Ratings provide an opinion on the capacity of an MFI to achieve its social goals It being understood that the social mission of a Microfinance Institution should be In line with the broad mission of microfinance, i.e. “provide access to reliable financial services to those usually excluded from formal financial services” A microfinance institution should be Socially Responsible and respect the fundamental rights of the different stakeholders (clients, staff, community in which it works, environment)

3. 2 June 2009 – SPTF in Madrid – Social Performance Ratings Planet Rating - What do we rate? – Rating scale Scale with strong emphasis on the evaluation of the Social Performance Management systems Considered as a strong predictor of performance Currently measurable and comparable Information and evidence of performance needed to reach the higher levels of the scale RatingDefinition 5 Advanced: Long-lasting commitment to social goals. Efficient management of social performance and social responsibility risks. Institution very likely to achieve a positive social impact. 4 Convincing: Clear commitment to social goals. Reasonable management of social performance and social responsibility risks. Institution likely to achieve a positive social impact. 3 In progress: Clear intent to reach social goals. Social performance management systems being implemented. 2 Incipient: Clear intent to reach social goals. Low capacity to manage social performance. 1 Intangible: Intention to reach social goals is non tangible. Low level of management of social performance.

4. 3 June 2009 – SPTF in Madrid – Social Performance Ratings Process in line with our usual rating process We review and verify the information provided by the MFI Manuals describing Processes, Procedures or Codes of Conduct, Internal and external audits, MIS information, Surveys or research conducted by MFI partners And evaluate process and discuss performance through interviews with MFI management MFI staff Clients (few) MFI Partners and stakeholders (competitors, regulators, fund providers, etc.)

5. 4 June 2009 – SPTF in Madrid – Social Performance Ratings Example: how do we rate « Depth of Outeach »? Combination of information on Credit Methodology (min and max loan amounts; requirements on collateral) Strategy to choose the location of branches Detailed data on geographical outreach (% of clients by districts matched with socio- economic characteristics of the districts) Information on the distribution of all MFI branches across districts Data taken from Credit Bureaus (« exclusive clientele ») Any client-level data available at the MFI Networks can help tremendously in making sure that this type of information is available and comparable for all MFIs in their country

6. 5 June 2009 – SPTF in Madrid – Social Performance Ratings Example: how do we rate « Depth of Outeach »? MFI 1 and 2 are likely to have a deeper outreach; MFI 4 is likely to be reaching to less « excluded » clients More information would be needed about MFI 5 to validate hints that the MFI is working with more remote clients Level of Poverty in the areas where the MFI works Very poor Poor Total poor Exclusive clientele Average loan amount Amount MinAmount MaxCollateral National Poverty line 14%25%39% MFI 121%36%57%68%USD 208PEN 200PEN 3 000Solidarity Group MFI 228%24%52%61%USD 301PEN 50PEN 10 500Solidarity Group MFI 317%30%47%59%USD 332PEN 300PEN 20 000 Hard Collateral for a minority MFI 410%32%42%48%USD 227PEN 200PEN 6 000Solidarity Group MFI 527%31%58%N/AUSD 228PEN 300PEN 3 000 Hard Collateral in some cases

7. 6 June 2009 – SPTF in Madrid – Social Performance Ratings Our version of the Social Rating with Survey Survey conducted by an independent Survey Company Process design to ensure The Independence of the Rating Agency The capacity Building of the MFI Staff Use of local resources, allowing development of the sector and cost efficiency Survey Field work Initial Needs Assessment Rating on-site mission Survey Company Selection Survey Preparation Survey Results Survey Monitoring Rating Preparation Longer term collaboration 5 weeks 4 weeks1-2 weeks Surveyors MFI Rating Agency 1 week4 days

8. 7 June 2009 – SPTF in Madrid – Social Performance Ratings Full information on the Performance of the MFI Rating designed to allow Investors to differentiate MFIs based on their social performance as well as on their financial performance

9. 8 June 2009 – SPTF in Madrid – Social Performance Ratings Data input for Social Ratings Document performance Check the reliability of data and compliance with of procedures Analyze and understand the reality behind the figures Compare performance across MFI MIS Surveys Research Internal Audit BenchmarksEvaluation Improve probability of good performance Systems Survey during the rating Get a confirmation of performance on key items and guarantee standardized output information: Characteristics of outreach Client satisfaction Client protection Rating