Simple standards or burgeoning benchmarks

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Simple standards or burgeoning benchmarks?

• Institutionalising social performance monitoring,
  assessment and auditing of microfinance.
• James Copestake, University of Bath, UK.
• Imp-Act workshop, South Africa May 2003.

2
Key question

• Q. What sort of industry-wide standard or
  benchmark for social performance assessment would
  be most useful?
• A.
• One that is simple and flexible.
• Short checklist consistent terminology.
• One that is compatible with more specific
  standards developed by sub-groups of MFOs.

3
A short checklist

• What social performance goals and indicators do
  you use?
• How do you monitor client status over time?
• How do you periodically assess impact of services
  on clients, including leavers?
• How do you assure quality and improve on systems
  for monitoring client status and impact?

4
Outline of presentation

• 1. Pros and cons of benchmarking.
• 2. A typology of social performance goals.
• 3. A simple method of monitoring client status.
• 4. Institutionalising impact assessment.
• 5. Building quality assurance from the feedback
  loop to social performance auditing.

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1. Benchmarking

• Definition Standard checklist ( measures) of
  good practice for a peer group.
• Well established as a learning and audit tool for
  financial performance assessment.
• Potential benefits clarity, transparency, gains
  in resource allocation and efficiency.
• Potential problems use by powerful to impose
  their views, excessive uniformity, high
  compliance costs, distorted incentives.

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2. Social performance goals (1)

• Schreiners dimensions of outreach
• Breadth and Scope -gt MIS
• Depth -gt client status monitoring
• Worth less cost equals net worth, or value added
  to client -gt impact assessment
• Length -gt financial performance

7
Social performance goals (2)

• Greeleys poverty impact framework
• direct impact on income poverty
• direct impact on other aspects of poverty
• indirect / wider impact on poverty.

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Synthesis
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Monitoring client status

• Develop a system whereby staff (perhaps with the
  help of clients themselves) can routinely
  allocate clients to one of a small number of
  categories.
• For example Let A Secure
• B Vulnerable
• C Destitute

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An illustrative monitoring report
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2. Impact Assessment.2.1 Client status
monitoring is the foundation

• To generate hypotheses as to possible impact
• to provide a frame for sample selection
• To provide a base of complementary information
  with which sample data can be combined
• To enable inferences to be drawn about how
  representative impact findings are likely to be.

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2.2 Flexibility vs consistency

• A flexible model - analogy with fire detection
  systems and emergency services.
• Sampling opportunistic versus formal sampling
  systems.
• Consistency Standardising helps to realise
  economies of scale in training and to permit
  aggregate analysis.

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4. Performance management

• Vicious cycle Poor performance -gt reluctant
  performance assessment -gt poor assessment -gt poor
  knowledge base for improvement ...
• Virtuous cycle Good performance assessment -gt
  innovation -gt better performance -gt willing
  performance assessment -gt better knowledge base
  for improvement
• How to encourage the latter?

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Social performance auditing

• Purpose to promote a culture of self-improvement
  or organisational learning.
• Also institutionalising the ideas behind the
  feedback loop study.
• A substitute for stand-alone donor sponsored
  impact studies.
• Scope for linking to social ethical
  accounting institutional/poverty/gender audits
  consumer protection.

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Social performance audits

• Four requisites
• Agreement on a social performance standard or
  benchmark.
• Development of a protocol for the SPA process.
• Build up a pool of independent SP auditors - and
  mechanisms for auditing the auditors!
• Convince external stakeholders to adopt.

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Summary
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Breakout groups

• Routine impact monitoring
• Organisational learning, feedback loop and
  institutional assessment/auditing
• Client learning / Internal learning systems