Oikocredit and Social Ratings

1
Oikocredit and Social Ratings
2
Oikocredit in the world

• Working in 65 countries around the world.
• 10 Regional Offices
• Total Portfolio amount USD 395 M
• Number of clients 695 (437 active in
  Microfinance)
  
• Loan Average USD 800 thousand

3
Regional OfficeSouth America - Northern Region

• Operations in 3 countries
• Total Portfolio amount USD 42 M
• Number of clients 50
• Loan Average USD 721 mil
• Growth in 2007 46

4
Oikocredit and SPM

• Two projects in SPM plan
• Social Rating
• Implementation of PPI
• Technical Assistance for SPM improvement at MFIs
• Use of SP information in Oikocredit systems

5
Collaborations Oikocredit in social ratings

• Microfinanza Rating Peru,Ecuador
• Planet Rating - Colombia
• CERISE - Bolivia, Paraguay, Argentina

6
Collaboration Oikocredit-Microfinanza Rating

• Perform a Social Rating, as a SPM diagnosis of 5
  of Oikocredit clients in Ecuador and Peru
  
• Identify strengths and weaknesses on MFI systems,
  related to mission accomplishment.
  
• Get objective judgment on MFIs which can be
  compared with other MFIs
  
• Establish a SPM improvement plan with MFIs

7
Why an external social rating?

• Valid methodology specialized in ratings in
  depth verified information
  
• Independent objective information
• Standard methodology - Comparison with best
  practices social indicators quantitative and
  qualitative information
  
• Importance for social evaluation as it is given
  to financial evaluation
  

8
The rated MFIs so far


1Banco Solidario database, April 2008
2 Edpyme Proempresa database,
3 Fundación Espoir database April 2008
9
How does Oikocredit use this information?

• For external purposes
• To better inform our stakeholders and investors
  on our clients emphasis on the double and triple
  bottom lines.
  
• For internal purposes
• To understand better the MFIs emphasis on the
  double and triple bottom line
  
• Use it in due diligence - discount on loan prices
  for those MFIs that rate high in social
  performance
  
• Technical Assistance on SPM improvement for those
  MFIs that go through the rating process
  
• To promote the use of the PPI as a poverty
  measurement tool.

10
Problems encountered during the Rating Process -
Main Disadvantages

• High costs
• Time spent on visits and report
• Operative issues coordination of survey,
  interviews
  
• Getting information of social indicators

11
Next steps on the project

• Two or three more ratings are slated to take
  place during the coming months. Some of the
  interested MFIs are Edpymes Edyficar (Peru) and
  Huellas Grameen (Ecuador).
• In the meantime, discussions will be held with
  the 3 MFIs that have been rated to develop their
  SPM plans.

12
thanks!!