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Introduction to the Social Performance Indicators (SPI) Tool

Introduction to the Social Performance Indicators (SPI) Tool. Introductions & Expectations. Microfinance knowledge exchange network focused on disseminating good practices Core members : five French organizations specialized in microfinance

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Introduction to the Social Performance Indicators (SPI) Tool

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  1. Introduction to the Social Performance Indicators (SPI) Tool

  2. Introductions & Expectations Microfinance knowledge exchange network focused on disseminating good practices Core members: five French organizations specialized in microfinance Partners: MFIs, networks, donors, researchers, and investors in Africa, Latin America and Asia Working areas:impact and social performance, governance, rural and agricultural finance. www.cerise-microfinance.org CERISE

  3. CERISE and Social Performance Introductions & Expectations • Actively promoting social performance in the MF sector since 2001 • Created Social Performance Indicators tool (SPI) to assess performance of MFI partners • Since 2008, broadening focus to include investors –SPI Investor under development

  4. ProsperA network Introductions & Expectations • PROmotion of Social PERformance – an Alliance initiated by CERISE and itspartners • Over 60 members (June 2011) • Networks fromAfrica, Asia and Latin America • MFIs • Multilateralagencies • TA providers from Europe • Social investors www.cerise-microfinance.org/-reseau-prospera-

  5. Overview 1. Background to the SPI 2. The SPI in a nutshell 3. SPI and SPM Objective Familiarize participants with the SPI and its use as a Social Performance Assessment tool and entry point to Social Performance Management

  6. 1. Background to SPI

  7. Development process Background to SPI • 90’s: Emphasis was on financial performance, little attention for social performance • First discussions in 2001 (CERISE & partner MFIs): Microfinance and social links • A need to improve accountability + visibility for social performance, in order to promote microfinance’s core priority. But, no tools!

  8. Development process of SPI initiative Background to SPI • SPI 1 (2001 – 2003) • Conceptual framework (research and practitionners) • SPI tool version 1 • SPI 2 (2004 – 2005) • Field testing: 25 MFIs in different contexts • SPI version 2 and operational guide • SPI 3 (2006 – 2009) • Promotion of SP, association with SPTF • SPI version 3 compatible with MIX SPS • SPI4 (2009 – 2011) SPI for the investors Work with MFIs to innovate and improve practices: rural finance, new products, savings, consumer protection, client surveys, MIS

  9. Most recent version of SPI (3.3) Background to SPI • Excel format, no macros! (compatible Mac/PC) • Compatible with Social Performance Standards reported to MIX • Integrates latest initiatives: Smart Campaign, SPTF Universal Standards, Seal of Excellence, MFTransparency, MIV Disclosures Guidelines. • Wiki to access material, ask questions, leave comments • SPI Standards of Use

  10. Who uses SPI? Background to SPI MFI Networks Benchmarking SP, standardized reporting, MIS Social Investors way to dialogue withpartners, raiseawareness of SP Oikocredit, Kiva, Grameen-Crédit Agricole, AFD, Sidi, etc Foro Lac Fr, RFR, Finrural, CIF, Consortium Alafia, MCPI… MFIs 450 SPI audits in CERISE/ProsperAdatabase (around 350 MFIs) SPI usersfromProsperA network

  11. 2. The SPI in a nutshell

  12. SPI Layout Questionnaire (Excel) OperationalGuide (Wiki Page) • Contact information • Part 1: Profile, Social Strategy & Governance • Part 2: SP Indicators(4 dimensions) • Standards of Use • Guidelines by indicator • Information sources • Opportunity to comment

  13. What does it do? The SPI tool Intent Internal systems/activities Outputs Outcomes Audits the internal processes the MFI has in place for reaching its social mission. • Intent What is the MFI’s mission? Does it have clear social objectives? • Internal systems andactivities Are they in place to help achieve objectives? • Outputs Does the MFI know whether it’s reaching target clients? • Outcomes Does the MFI know whether its clients have seen improvement? NOT IMPACT ANALYSIS!

  14. Content of Questionnaire The SPI tool • Part One: Description of MFI, Context, Social Strategy, Financial performance • Part Two: Social Performance Indicators • Dimension 1: Targeting and Outreach • Dimension 2: Products and Services • Dimension 3: Benefits to Clients • Dimension 4: Social Responsibility Eachdimension isbrokeninto 3 criteria and has 16-19 questions for a total of 25 points

  15. The SPI tool Questionnaire – Part Two • Dimension 1: Targeting and Outreach Selection of operating zones Geographic Client selection devices that favour poor and excluded people Individual Services characteristics that facilitate access of the poors and excluded Pro-poor methods

  16. The SPI tool Questionnaire – Part Two • Dimension 2: Products and Services Diversity of credit, voluntary savings Range of services Decentralization, rapidity, transparency, drop-outs Quality of services Direct or through partnership: transfers, mobile banking, fin ed Innovative and non financial services

  17. The SPI tool Questionnaire – Part Two • Dimension 3: Benefits to Clients Tracking changes, impact studies, profit-sharing Economic benefits Level and quality of participation Client participation Group formation, collective management, client advocacy Social capital/client empowerment

  18. The SPI tool Questionnaire – Part Two • Dimension 4: Social Responsibility Salary scale, training, participation in decisions, turn-over To employees To clients Consumer protection Respect of local culture, local development, environmental protection To the community and environment

  19. Internal self-assessment or external audit Centralized (top management) or participatory approach (different stakeholders and levels of the MFI) 1-3 day process (centralized) / 4-6 day (participatory) The SPI tool Methodological options

  20. Simple  The SPI tool Why use the SPI? Quick & easy to apply; easy to verify Results presented in radar and diamond graphs Easy to analyze  Standardized results  Compatible with SPS Peer group analysis

  21. Example of results: A participatory MFI The SPI tool • Context and strategies • Rural, women business sector • Mature MFI • Previous crises in MF sector (i.e: over-indebtedness, mission drift) has pushed social agenda forward • SPI results • Strong and balanced performance • Range of services and Benefits to clients can be improved

  22. Communication withpartners 2 page summary

  23. Social Reports

  24. The SPI Database Databaseworkingthrough Excel More than450 SPI results sent by 350MFIs (sept 2011 ) Results are processed on a confidential basis Enables to generate benchmarks to compare the SPI results of an MFI withthose of a peer-group

  25. Comparing MFI / national benchmark Criteria 2: Choose the MFI (Ex: Crecer) Criteria 1: Choose the country (Ex: Bolivia)

  26. Comparing 2 national benchmarks Criteria 2: Choose the Country (Ex: Ecuador) Criteria 1: Choose the country (Ex: Ecuador) Criteria 2: Choose the type of governance (Ex: Credit Union) Criteria 1: Choose the type of governance (Ex: NGO)

  27. 3. SPI and SPM

  28. From “SPA” to “SPM” Systematic assessment of social performance and systematic use of this information to improve practices Social Performance Management SPA a measure of how well an institution uses its systems and operations to generate positive social benefits SPM the use of this measure to make decisions

  29. SPI as a diagnostic tool SPI as a management tool SPI as a communication tool SPI and SPM SPI as an entry point to SPM

  30. Three main components Social Performance Management • Setting clear social objectives and strategy • Monitoring progress in meeting these objectives • Using social performance information to make decisions Data collection and use of information isat the heart of SPM

  31. SPI as a diagnostic tool Gives an overview on social performance for the MFI, strengths and weaknesses Help identify priorities for the MFI to improve SP Identifies key criteria to be followed Serves a basis for an internal control system (“social dashboard” or social scorecard) SPI and SPM

  32. SPI as a management tool SPI and SPM • Once identifying priority areas with the SPI, the SPI can be combined with other tools to address them An MFI wants to… SPM Tool Understand/ Improve overall SP or avoid mission drift Internal social audit (ex.: SPI) Expand outreach to the very poor PPI/PAT Understand high drop-out rates Market research Verify decision making processes to integrate SP data Governance analysis

  33. The SPI promotes transparent communication within MFI (Board, general assembly, etc.), with investors, clients, the sector, authorities and the general public Consistent results, easy to prepare reports and briefs Showcases good practices, highlights efforts to improve SPI and SPM SPI as a communication tool Good SPM hinges on effective communication of the social performance agenda to all stakeholders Creates a common language on social aspects of microfinance and contributes to benchmarks

  34. From SPI to Social Dashboards

  35. For investors, the SPI is also… SPI and SPM Does the MFI reflect the investor’s own values? A diagnostic tool BetweenMFI-investor, between investors-sharesholders, among investors A communication tool • Id’s priorities for managing relationships with MFIs & reduces investment risks through better knowledge of partners / potential capacity building A governance & management tool

  36. For more information: Website: www.cerise-microfinance.org Email: cerise@cerise-microfinance.org Wiki: http://spiwikiv3point3.pbworks.com

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