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Social Performance Track

Thursday, November 5^th, 2009, from 11:00am to 12:30pm

Access the PowerPoint presentation and PDF notes 

Session Notes

Section 1: Overview

There are different aspects of MFI performance, including outreach (how many clients are accessed?), financial effectiveness (can the institution grow sustainably?) and social effectiveness (how well are client needs being met?). We, as an industry, should not believe all aspects of microfinance alleviate poverty, but test assumptions and take our learnings to improve microfinance products and services. There is innovative work being done in social performance management (AMK example). Social performance management is important to funders and they are instigating innovative ways to reward social performance metrics (Oikocredit). Lastly, there are still evolving ways to measure social performance management such as client household savings.

All presenters spoke directly off of detailed slides. Please view presentations for presenter reports.

Section 2: Presenters’ Report Out

Presenter 1: Paul Luchtenburg

·         AMK is a learning organization and focuses all activities around their mission. They measure both financial and social performance.

·         Lesson Learned: Because of SPM program,

o    got better interest rate from Oikocredit,

o    received international recognition, and

o    has confidence to stakeholders.

Presenter 2: Ging Ledesmas

·         Background on Oikocredit: Empowering the disadvantaged is at the core of Oikocredit’s  mission as an organization.  As a social investor, it is imperative that Oikocredit aligns its investments and relationships with this mission.

·         Lessons learned and challenges

o    What does work?

§  working with strategic partners, i.e., Cerise, Grameen Foundation

§  build on what is available and maximizing the use ofinformation that is already being collected by MFIs

§  promote industry-wide initiatives

o    What doesn’t work:

§  organizations working independently in the area (must all work together)

§  introducing the tools at MF without training

§  providing tools and no feedback on the results of the use of these tools

Presenter 3: Irina Ignatieva

·         Background on Concern

o    Working with social investor who “takes care of MF” side of the business, and Concern will focus on social returns.

o    Proposed definition of social returns: capital growth in client households specifically (capital from MFI in MFI and capital in household).

·         Lessons Learned

o    Social returns have to be measureable (and thus comparable) and easy to verify and comparable to ROE

o    Focus on savings (client’s financial capital, subsistence level and smoothing cash flow) then savings becomes source of capital.

o    Final slide outlines the strategic and tactical actions, reporting and desired impact to be discussed and agreed (include processes and systems)

·         Challenges

o    How do you manage the balance between social returns (of client) and financial returns (of MFI), does goal setting need to choose one over the other? This is an area of negotiation between MFI and investors; what is the balance social or financial? And to what extent?

Section 3: Q&A Session

·         Measure of savings as measure of social impact, does it leave out other measurements of social impact (leave out other measures) for instance how is the savings used. Savings may go down b/c I just put a new roof on my house, put my kids to school, these should be included in the measurement

·         How you go about selecting client sample. How do you go about sharing this info with MNG. Tools is staff satisfaction survey and how do you administer it and use the information

·         PPI implementation, what was the response of partners in implementing PPI?

·         Discounts in rate on debt are related to outcome of SPM measurement or that they do it?

·         For Irina: clarification of social investing, what do you mean by that… is anyone who invests in MF a social investor

·         What is % of budget covered by financial return for O? What is the cost to O of doing SPM? Don’t understand that O helps MFI w/ 17M clients, but O impacts only 1M.

·         What about the bad experiences?

·         Ging, how do you help partners in SPM? 

Original notes by Sandra Winters; edited by The Foundation for Development Cooperation.