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Microfinance knowledge exchange network focused on Ethical and Responsible Finance

Making Finance Responsible: Assessing Social Performance of Microfinance Institutions The role of the Microfinance Associations Network Meeting – SPTF – Jordan 2012. Microfinance knowledge exchange network focused on Ethical and Responsible Finance

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Microfinance knowledge exchange network focused on Ethical and Responsible Finance

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  1. Making Finance Responsible: Assessing Social Performance of Microfinance InstitutionsThe role of the Microfinance AssociationsNetwork Meeting – SPTF – Jordan 2012

  2. Microfinance knowledge exchange network focused on Ethical and Responsible Finance Core members: five French organizations specialized in microfinance Partners: MFIs, networks, donors, researchers, and investors in Africa, Latin America and Asia Themes:impact and social performance, rural and agricultural finance, governance. www.cerise-microfinance.org CERISE

  3. ProsperA network Introductions & Expectations • PROmotion of Social PERformance – an Alliance initiated by CERISE and itspartners • Over 70 members (Dec. 2011) • Networks fromAfrica, Asia and Latin America • MFIs • TA providers from Europe • Social investors www.cerise-microfinance.org

  4. SPI, a social audit tool for MFIs • Developed since 2000 with MFIs & partners • Full assessment of social performance • Identify strengths & weaknesses • Communicate • Compare to peers (CERISE database) • Fully aligned with Mix Market (automatic) • Integrates standards of the sector (CPP,USSP, Seal…) • Free access to SPI and guide (with info to Cerise) • Widely used in the MF sector by Networks, TA providers, Investors

  5. 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/Proparco, GoodReturn, etc LAC: ForoLac Fr & itsmembers (RFR, Finrural,…) Africa: AFMIN mb, CIF Asia: SPTF WG, MCPI MFIs Over 500 SPI audits in CERISE/ProsperAdatabase (about 400 MFIs)

  6. Transparency, capacity-building and advocacy on Social Performance • Main challenge for credibility and sustainable growth of the sector • Key role of the networks • See the Decision Tree for networks / SEEP support to MFA • Social assessment as an entry point for SP Strategy • Rich experience of the networks so far • Foro Lac Fr in Latin America (started SPI audits in 2007) • CIF in West Africa + AFMIN in Africa • Asian networks launching SPI audits

  7. Content of Questionnaire The SPI tool • Part One: Basic details on the MFI, Profile, Social Strategy, Financial performance, Governance • Part Two: 70 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

  8. Standards of use of SPI • Principles: the SPI charter • The SPI tool: always use the latest version • Process: the SPI Operational guidelines • The steps for internal/external – Centralised/participatory • The process for verification and quality control • The staff: knowledge about SPI/ Links with Cerise – ProsperA(updated on training, tools, experiences, etc.)/ Certification • Reporting: Individual report/ national analysis + report data to Cerise/ProsperAdatabase (peer group)

  9. Internal self-assessment (+/- 3hours) 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

  10. 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

  11. Cerise Data base: Comparing MFI Criteria 2: Choose the MFI (Ex: Crecer) Criteria 1: Choose the country (Ex: Bolivia)

  12. Examples of the role of the Networks

  13. CIF in West Africa: Assessment & Management SPI Training • 2008, training on SPI + Set up a Reference Group (12 managers, 2 by members) • 2009: Peer reviews using the SPI tool. • 2010, Define an Action plan: • reach more family agriculture => overview of practices • increase outreach to women & vulnerable gp • improve savings services • better use of surpluses => work in progress • set up a social performance M&E and impact assessment system => see reports + dashboards Peer Review SPI Social report Ag practices Social report Workshops Field work

  14. CIF - Continued Agriculture • 2011, focus on two areas: • financial services for rural development and family farms • Consumer protection. • Early 2012, the six cooperatives applied the Smart Campaign’s self-assessment tool, • A full-blown assessment of members’ practices is expected to take place later in 2012 through peer reviews coordinated by CERISE. Smart self assessment Social Report CPP Peer Review CPP Workshops Field work

  15. Social Reports

  16. From SPI to Social Dashboards

  17. Value-added of the Networks • Knowledge of the members (accurate assessment, also linked to peer control) • Economies of scale (improving capacities to conduct audits, capacities to work over time on action plans) • Member-focused agenda: advocacy (e.g. RFR), capacity-building / strategic decisions (e.g. CIF), transparency (e.g. Finrural, Amucss) • Services for the members

  18. More informations… • CERISE website: www.cerise-microfinance.org • Contact CERISE:cerise@cerise-microfinance.org • SPI Wiki Page http://spiwikiv3point3.pbworks.com

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