Social performance for microfinance has been defined as “the effective translation of an institution’s mission in to practice in line with the accepted social values”. While this definition appears sound in theory, it leaves the issue of articulating what social mission MFIs can pursue effectively un-addressed. This has resulted in a situation where MFIs social performance strategies have lacked focus, and essential issues such as MFIs’ conduct with their clients have been ignored.
M2i assist MFIs in implementing effective social performance management using a comprehensive approach which, on the one hand takes into account all aspects of social performance and, on the other, allows MFIs to plan specific interventions that can have a discernible impact on their clients. Our approach includes:
- Guiding Board and Senior management on elements of SPM and their role
- Unpacking the MFI mission for strategic objectives
- Guiding on tools to monitor outreach- we train MFI staff on Progress out of Poverty Index-PPI (developed by Grameen Foundation) and help the audit team to ensure quality checks. Other social indicators relevant to the MFI’s mission are also suggested
- Help using tools to monitor client satisfaction and client exit
- Aligning internal audit to monitor client protection issues
- Aligning HR systems to social objectives
- Internal and external Reporting on social performance
Apart from providing handholding support on SPM, M2i conducts Strategy Workshops on SPM for MFIs. The workshops provide an overall perspective of SPM, key elements of SPM and implementation process. We have started introducing newly developed the SPTF Universal Standards for Social Performance Management (“USSPM”) to the MFIs to improve their double bottom line.
Client Protection Assessments (CPAs)
M2i conducts “Client Protection Assessments” for MFIs (Smart campaign) which is a diagnostic study of the way MFI translates the Client Protection Principles into practice. The MFI is assessed on 7 principles of Client Protection. The assessment identifies both strong practices and areas that may present vulnerabilities for the MFI. Suggestions are presented to the MFI to improve implementation of the client protection principles.
M2i is also involved in conducting “Social ratings” of the MFIs where the aim is to provide the MFI an independent judgment on key elements of its social performance. This involves an assessment of MFIs’ systems, poverty outreach and client feedback to assess the social performance of MFIs. The rating is based on Universal Standards for Social Performance Management. M2i uses its own rating tool which is based on ADDO (Approval, Documentation, Dissemination and Observance) framework developed by M2i.