1. Micol Pistelli, Manager Social Performance Standards, MIX Social Performance Standards

2. 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….

3. 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).

4. 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 The SPTF

5. SPTF Governance The SPTF is governed by a 13 Member Steering Committee, with members from every region and a fixed number of representatives from each of the major stakeholder categories:  2 MFIs: 1 NGO and 1 NBFI or bank  2 NGO networks  3 MFI networks: 1 Global, 1 Regional and 1 National  2 donors  2 social investors  2 from social performance support organizations For more info please visit: http://www.sptf.info/page/steering-committeehttp://www.sptf.info/page/steering-committee

6. 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

7. 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:

8. MIX role as a reporting agency: MFIs Donors and Commercial Investors Rating Agencies Clients of MFIs Networks of MFIs Regulators 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

9. MIX agenda on Social Performance Standards  Be a leader in the process of creating a core set of indicators for the microfinance industry to report on social performance  Collect data on the social performance indicators and make them available publicly  Improve social performance benchmarks which will eventually be integrated into the MicroBanking Bulletin benchmarks  Disseminate and promote information sharing and news about social performance reporting and standardization.

10. 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:  Develop a system for verification of social indicators  Identify technical assistance needs and identify funding sources  Promote reporting of social indicators to the MIX

11. 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 MFI’s performance against peers

12. 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

13. THE SPS REPORT

14. 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 What is social performance? Social performance encompasses the entire process by which impact is created. It includes analysis of an institution’s 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).

15. Social Performance Indicators Framework Outreach Q11- Geographic outreach Q12- Women outreach Q13- Clients outreach by lending methodology Q1–Mission & Social Goals Q2- Governance Q3–Range of Products and Services (financial & non-financial) Q4–Training of staff on social performance Q5–Staff performance appraisal and incentives Q6–Market research on clients Q7–Measuring client retention Q14–Poverty assessment Q8– Social responsibility to clients Q9-Cost of services to clients Q10–Social responsibility to staff Q15 – Social responsibility to the community Q16–Social responsibility to the environment Intent Strategies & Systems Policies & Compliance Achievement of social goals [---------------------------- PROCESS---------------------------- - - -- ] [-------------------------------- RESULTS -----------------------------] Outputs and outcomes Q17-Products Q18–Employment (Family & Hired in credit supported ents.) Q19–Children in School (girls/boys) Q20–Poor and very poor clients Q21–Clients in poverty Q22–Clients out of poverty Intent Internal systems/activities OutputsOutcomes Impact 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)

16. MFIs that have reported ( Feb – May 2009)  The report was sent on February 2009 to all MFIs registered on MIX Market  In 3 months since the launch of the reporting form, over 70 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 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.

17. How to ensure quality of the data reported: Besides performing consistency-check of the data reported by the MFIs, MIX is also engaged to provide deeper information of the data in the following ways:  Interview the MFIs that have reported to acquire a deeper knowledge about the information provided. Articles are published on the new SPTF indicators blog (ran in 3 languages: English, Spanish and French) and on the newsletter about SP reporting. For more info visit: http://www.themix.org/standards/social-performancehttp://www.themix.org/standards/social-performance  Ask MFIs to provide written documents in support of the information provided to be posted on MIX website.

18. Social ratings are the principal instrument that provide detailed information about the data reported by the MFIs. Moreover they are a valuable instrument for data validation and for identifying areas that need improvement To know more about social rating agencies you can visit: http://www.microfinancegateway.org/p/site/m/template.rc/1.11.4 8260/1.26.9233/ http://www.microfinancegateway.org/p/site/m/template.rc/1.11.4 8260/1.26.9233/ Rating Fund: http://www.microfinance.lu/231.html?&L=1http://www.microfinance.lu/231.html?&L=1 External data validation

19. 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

20. MIX next steps on social performance for the year 2009 - Participation at the SPTF Meeting in Madrid (1-5 June, 2009) Goals of the meeting: Hear the voice of the MFIs and regional, national networks about the process of data reporting; address issues regarding improvement of MFIs’ MIS; assess areas of social performance where MFIs need more technical assistance; define a clear process for SP data validation - Launch of the SPTF Blog on social performance indicators and newsletter (June 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

21. For more information about MIX Social Performance Program please contact: Ms. Micol Pistelli at mpistelli@themix.orgmpistelli@themix.org And visit our website: http://www.themix.org/standards/social-performancehttp://www.themix.org/standards/social-performance For more information about the SPTF, visit: http://www.sptf.info/ http://www.microfinancegateway.org/p/site/m/template.rc/1.11.48260/ Thank you!

22. MICROFINANCE INFORMATION EXCHANGE, INC. The leading provider of business information and data services for the microfinance industry. Web: www.themix.orgwww.themix.org Email: info@themix.orginfo@themix.org Headquarters: 1901 Pennsylvania Ave., NW, Suite 307 Washington, D.C. 20006 USA Other Locations Lima, Peru ● Dakar, Senegal ● Guragon, India ● Jakarta, Indonesia