Developing a System for Evaluating Small Microcredit Programs Interim Research Report January 10, 2012

1. Developing a System for Evaluating Small Microcredit Programs Interim Research ReportJanuary 10, 2012 York University Community Finance Project (YUCFP) in partnership with ACCESS Community Loan Fund Brenda SpottonVisano, PhD and Neil Britto

2. Overview Topic Slides #3 #4 #5-7 #8-11 #12-17 #18 • Project Objective………………………………………………… • Process and Outcomes to Date…………………………… • Goals of Evaluation and Program Evaluation Commitments of ACCESS....................................... • Comparison of Industry Options ………………….……. • The ACCESS Alternative: Proposed Program Evaluation Indicators……......................................... • The Flow of Social Performance Information……….

3. Project Objective • Develop a system of self-evaluation for small volunteer microcredit programs in Canada that • Has comprehensive coverage options spanning an array of performance objectives • Offers an evaluation of the program’s effectiveness, efficiency, impact, and social performance • Is informed by program evaluation industry standards • Offers an independent and credible set of metrics for volunteer organizations to use when reporting their performance • Is low cost, flexible, accessible, and easy to use

4. Process and Outcomes to Date

5. Goals of Program Evaluation • Effectiveness • for investigating whether a program has demonstrable effects on specific targeted outputs and activities. • Illustrative Question: “Is the program achieving the goals and objectives it was intended to accomplish?” • Efficiency • for assessing the cost-effectiveness of the program. • Illustrative Questions: “Are the program’s activities being produced with appropriate use of resources such as budget and staff time?” • Policies and Practices • For assessing the integrity and effectiveness of program policies and practices. • Illustrative Question: “How well does the program manage client information?” • Impact • for investigating any impacts beyond the immediate outputs and activities. • Illustrative Question “Do clients experience changes in personal income through microloans?”

6. ACCESS’ Evaluation Commitments and Representations Trillium Grant

7. ACCESS’ Evaluation Commitments and Representations Presented by Alex Kjorven to Future Fund (Trillium) Evaluation Workshop July 19, 2010 as posted http://futurefundevaluation.wordpress.com/projects-evaluations/ Evaluation metrics currently under consideration to evaluate the effectiveness of loans disbursed and the social impact of our lending program include: • Number of new businesses created or new lines of business initiated • Number of referrals for mentorship services (internally/externally) • Number of new employees hired by the business since receipt of loan • Financial metrics such as profits and total spending • Improvement to lenders credit rating as a reflection of their improved ability to access capital in the future

8. Comparison of Industry Options – Operation

9. Profile: Planet Rating: Social Rating Product Planet Rating, headquartered in Paris, France, is a specialized microfinance rating agency offering evaluation and rating services to microfinance institutions (MFIs), using the GIRAFE and the Social Performance methodologies. To date, Planet Rating has conducted over 600 missions in more than 75 countries and continues to expand its international presence. Planet Rating has been recognized by the Rating Fund I, the Rating Initiative, the Moroccan APP and the Latin American Rating Fund II.-From their website: http://www.planetrating.com/EN/ Relevant for small, volunteer microloan programs in Canada? NO… Costs are prohibitive ….designed for large formal microfinance organizations…benchmark measures are unavailable for Canada

10. Profile: MicrofinanzaSocial Rating Product MicroFinanza Rating is a leading microfinance rating agency. Since 2000 we strive to produce independent and qualitative information that promotes responsible flow of investment towards the microfinance industry. This is achieved through provision of a comprehensive package of institutional and social performance assessment services to microfinance institutions (MFIs), investors, regulators, donors and networks. MicroFinanza Rating has performed about 600 assessments so far in over 60 countries worldwide.- From their website: http://www.microfinanzarating.com/ Relevant for small, volunteer microloan programs in Canada? NO… Costs are prohibitive ….designed for large formal microfinance organizations

11. Profile: Impact Reporting and Investment Standards (IRIS)Financial Service Sector Supplement Impact Reporting & Investment Standards, or IRIS, is a common language for describing the social and environmental performance of an organization.  IRIS provides an independent and credible set of metrics for organizations to use when reporting their impact.  IRIS indicators span an array of performance objectives and include specialized metrics for a range of sectors including financial services, agriculture, and energy. Like financial accounting standards, IRIS provides a basis for performance reporting and organizations need only report on applicable metrics from the IRIS library -From their website: http://iris.thegiin.org/ Relevant for small, volunteer microloan programs in Canada? NO…no scope to assess volunteer and capacity building contributions ….designed for large formal microfinance organizations …bases of comparison irrelevant for Canadian context

12. The ACCESS Alternative: Performance Indicators, Reporting Format and Information Management ► The proposed social performance assessment includes assessments of both efficiency and effectiveness. ► The proposed measures express greater consideration for the small size of Canadian microcredit organizations. ► The social performance assessment requires significantly less resources to complete. ► The proposed indicators avoid using any summary or composite score in the final report. ► The proposed assessment rebalances and refocuses the set of indicators to better reflect an urban setting. ► The proposed measures are intended for use in the Canadian context. ► The proposed social performance assessment is designed to produce information valuable to internal stakeholders as well as external audiences. ► The provision of supports to help manage social performance information is unique to the proposed assessment.

13. Proposed Indicators - Effectiveness

14. Proposed Indicators – Effectiveness (Cont’d)

15. ProposedIndicators - Efficiency

16. Proposed Indicators – Policies and Practices

17. Proposed Indicators – Policies and Practices (Cont’d)

18. The Flow of Social Performance Information Tool Used Sequence of Tasks Social Performance Indicators(Effectiveness, Efficiency and Policy / Practice Indicators) Step One: Selection of IndicatorsSelected social performance indicators are represented in the three surveys in the form of a question. Non-Board Volunteer and Staff Survey (Completed by all volunteers and staff) Client Survey (Completed by all clients) Organizational Survey (Completed by one director) Step Two: Survey CompletionThe respective groups submit completed surveys to the individual managing the social performance report Step Three: Populating the SpreadsheetSurvey data are input into the spreadsheet template. The spreadsheet populates the key performance indicators from the survey data Spreadsheet Template (Aggregates all survey information. Allows for periodic reporting and storage of historical social performance information ) Social Performance Report(Completed report includes an indicator scorecard, discussion on historical social performance of the organizationand provides recommendations for potential improvements) Step Four: Report CompletionThe social performance indicators from the spreadsheet template provide the foundation of the social performance report