Micol Pistelli, Manager Social Performance Standards, MIX

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Social Performance Standards

• Micol Pistelli, Manager Social Performance
  Standards, MIX

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• In the microfinance arena, success of a
  microfinance institution (MFI) has long been
  associated with financial performance outcomes
  measured by loan portfolio quality, operating
  efficiency, and profitability.
• Yet, these indicators tell only part of the
  performance story in microfinance.

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Measuring the double bottom line

• There is a growing recognition that MFIs
  should be held accountable for the achievement of
  social outcomes as well as their financial
  performance.
• The development of ways to measure that social
  performance has been the focus since 2005 of a
  global industry-wide Social Performance Task
  Force (SPTF).

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The SPTF

• Composition consists of over 350 leaders
  from all over the world from every microfinance
  stakeholder group practitioners, donors and
  investors (multilateral, bilateral, and private),
  national and regional networks, technical
  assistance providers, rating agencies, academics
  and researchers, and others.
• Objectives
• Promote and support the management of social
  performance of MFIs
• Work towards developing standards and guidelines
  for social performance
• Assess the market demand for social performance
  information who wants the information and what
  information is considered most relevant?
• Advocate the value, importance and imperative of
  social performance in the MF industry
• Coordinate/Communicate/Disseminate information
  about global activities related to SP via the SP
  Resource Center

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• MIX (Microfinance Information Exchange,
  Inc.)
• As the leading business information provider
  dedicated to strengthening the microfinance
  sector,
• MIX has been charged by the SPTF to be the
  information platform where the social performance
  indicators will be collected, analyzed and
  publicly displayed

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Basic information about MIX

• MIX is a non profit organization focused on
  strengthening microfinance institutions by
  improving transparency and the flow of
  information within the sector.
• - CGAP
  - Citi Foundation
• - Deutsche Bank Americas Foundation -
  Omidyar Network
• - Bill Melinda Gates Foundation
  - IFAD
• - Open Society Institute the Soros Economic
  Development Fund
• And others, including the Michael Susan Dell
  Foundation for the Social Performance Standards
  Program

About MIX Our sponsors
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MIX role as a reporting agency
MIX collects, analyzes, and disseminates general
business information, financial and operational
data on MFIs, as well as general business
information on funders investors and donors
and service organizations, such as networks,
rating agencies and other market facilitators
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MIX Vision on Social Performance Standards

• Have a microfinance industry accountable for
  transparency and able to achieve measurable
  improvements with regard to its social
  performance.

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MIX agenda on Social Performance Standards

• Create a SPS report that collects the standard
  indicators selected by SPTF
• Collect data on the social performance indicators
  and make them publicly available
• Reach a critical mass of MFIs reporting on SPS to
  be able to perform data analysis
• Perform social performance benchmarks which will
  eventually be integrated into the MicroBanking
  Bulletin benchmarks
• Create a SPI reporting Toolkit for MFIs and
  networks
• Disseminate and promote information sharing and
  news about social performance reporting
  and standardization.

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MIX and the SPTF

• MIX is a member of the steering committee of
  the SPTF and is also leading the SP indicators
  group within the SPTF. The role of this group
  consist of
• Promote reporting of social indicators to the MIX
  by engaging with networks and social investors
• Perform user-surveys to receive feedback from
  MFIs about the experience with reporting on SPS
  refining indicators and glossary
• Identify technical assistance needs for MFI to
  improve SP data reporting
• P.S. To join this group contact
  mpistelli_at_themix.org

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Why do we need standardized indicators to measure
the social performance of an MFI?

• To determine whether microfinance institutions
  are meeting the social goals set out in their
  missions
• To improve both financial and social performance
  of an MFI
• To provide tangible indicators of achievement and
  attract funding from donors and social investors
• To increase the level and quality of information
  transparency in the microfinance industry
• To benchmark an MFIs performance against peers

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Which criteria did the SPTF follow in the
selection of the social performance indicators?

• Indicators had to be
• Relevant
• Easy for the MFI to obtain
• Easy to verify
• Not confidential for the MFI

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THE SPS REPORT
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What is social performance?

• Social performance is the effective translation
  of an institution mission into practice in line
  with accepted social goals that relate to
• Reaching poorer and excluded clients
• Improving the lives of clients and their
  families
• Widening the range of opportunities for
  communities

Social performance encompasses the entire process
by which impact is created. It includes analysis
of an institutions declared objectives, the
effectiveness of its systems and services in
meeting these objectives, related outputs and
outcomes (such as reaching larger numbers of very
poor households) and success in effecting
positive changes in the lives of clients (impact).
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Social Performance Indicators Framework
Impact
Intent
Internal systems/activities
Outputs
Outcomes
---------------------------- PROCESS-------------
--------------- - - -- ------------------------
-------- RESULTS -----------------------------
Achievement of social goals
Strategies Systems
Policies Compliance
Intent
Outreach Q11- Geographic outreach Q12- Women
outreach Q13- Clients outreach by lending
methodology
Q1Mission Social Goals Q2- Governance
Q3Range of Products and Services
(financial non-financial) Q4Training of staff
on social performance Q5Staff performance
appraisal and incentives Q6Market research on
clients Q7Measuring client retention Q14Poverty
assessment
Q8 Social responsibility to clients Q9-Cost of
services to clients Q10Social responsibility to
staff Q15 Social responsibility to the
community Q16Social responsibility to the
environment
Outputs and outcomes Q17-Products Q18Employment
(Family Hired in credit supported
ents.) Q19Children in School (girls/boys) Q20Poo
r and very poor clients Q21Clients in
poverty Q22Clients out of poverty
Indicators
MFIs that want to update their profile on MIX
Market with the social performance indicators are
expected to be able to report information on the
13 indicators contained in Part I of the report
(indicators highlighted in red)
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MFIs that have reported ( Feb July 2009)

• The report was sent on February 2009 to all MFIs
  registered on MIX Market
• In 5 months since the launch of the reporting
  form, over 90 MFIs have already reported on SP
  indicators
• The reports which have already been reviewed by
  MIX are published on MIX website at this address
  http//www.themix.org/standards/social-performance
  
• The report is currently available in 3 languages
  English, French and Spanish. It will also be
  available in Russian, Chinese and Arabic in the
  near future.

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Benchmarks and diamonds system

• When a considerable number of MFIs will have
  reported and a consolidated system of data
  verification will be in place MIX will start to
  create benchmarks on social performance
• Given the qualitative nature of the data,
  benchmarks will necessarily have a strong focus
  on the country and working environment in place
• In the future social performance will be
  integrated to financial performance in the
  diamond system of transparency

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Social Performance Reporting Award

• CGAP, Michael Susan DELL Foundation and Ford
  Foundation have launched the social performance
  reporting award, powered by MIX
• To be able to gain the Award MFIs have to fill at
  least the first part of the SPS report and send
  it to MIX
• To know more, visit this link http//www.cgap.org
  /p/site/c/template.rc/1.26.10625/

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MIX next steps on social performance for the year
2009

• - Launch of the SPTF Blog on social
  performance indicators and newsletter (August
  2009)
• Goals create a platform of information,
  analysis, exchange of experience and best
  practices about social performance management of
  the MFIs reporting on the indicators to MIX
• - Implementation of MIX Market 2.0
  including data on SP (Autumn 2009)
• Goals integrate social performance data
  into the new MIX Market website (2.0) which will
  allow to display SP data from MFIs on our
  database create a database with country data
  regarding social performance to serve as a
  background for the data reported by each MFI
• Creation of SPI Tool Kit (Autumn 2009)
• Goal Learning tool aiming at improving the
  understanding of the social performance
  indicators and data reporting in the MF industry.

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Thank you!

• For more information about MIX Social Performance
  Program
• please contact
• Ms. Micol Pistelli at mpistelli_at_themix.org
• And visit our website http//www.themix.org/stand
  ards/social-performance
• For more information about the SPTF, visit
• http//www.sptf.info/
• http//www.microfinancegateway.org/p/site/m/templa
  te.rc/1.11.48260/

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MICROFINANCE INFORMATION EXCHANGE, INC.
The leading provider of business information and
data services for the microfinance industry.
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