SPM Essentials

Module 1: The SPM FrameworkModule 1: The SPM Framework

The Definition of Social Performance

•The effective translation of an institution’s mission into practice.institution’s mission into practice.

Common social goals:

• Serving increasing numbers of poorer and more excluded people sustainably

• Increasing clients’ social capital, assets, income, and access to services

• Reducing clients’ • Improving the quality &

appropriateness of financial services through assessment of clients’ needs

• Reducing clients’ vulnerability

• Improving social responsibility of the MFI toward clients, employees, and communities

The Definition of “SPM”

• The processes an institution uses to translate its mission into practice. These include:

▫ Setting social targets;▫ Setting social targets;

▫ Measuring the progress toward these targets;

▫ Using the results for strategic decision-making-namely, to improve products, services, and delivery channels.

SP vs. SPM

• Social performance—whether or not you achieve your social goals.

• Social performance management—how you achieve your social goals.

Achieve Your Mission Through

Performance Management

Mission

Social

Performance Management

Social Performance

Financial Performance

Managing for Social

Results

Measure

Use performance

results to improve

products,

Define desired performance

Measure progress

toward desired performance

products, services, &

systems

Results

• Reaching target clients

Results

• Reaching target clients

Social Performance Pathway

Information use

clients

• Meeting target clients’ needs

• Change in target clients’ lives

clients

• Meeting target clients’ needs

• Change in target clients’ lives

10

OperationsStrategy

How the major initiatives fit togetherD

iffe

ren

t A

cto

rs

Client Protection

Social Performance

Smart Campaign • Invest in systems to

+ Institutional Commitment

Responsible Finance(do no harm)

Improve Clients’ Lives

Dif

feren

t A

cto

rs

Guidance: Imp-Act ConsortiumStandards: SPTF Universal Standards

for SPMReporting: The MIX SPS Report

MFT

Smart Campaign • Invest in systems to manage double / triple bottom line

•Measure client outcomes

• Tailor services to client need and vulnerability

Q & A

Save the Date for Module 2

Subject: Translating your mission into

social targets

Date/Time: February 15th at 9:30am Date/Time: February 15th at 9:30am

EST

Don’t miss it!

Main Stakeholders Invested in SPM

� Financial service providers (MFIs) invest in SPM to:

� Inform management decisions� Inform management decisions

� Preempt problems (e.g. unethical staff behavior, client drop-out)

� Retain clients

� Attract investors/donors

� Avoid reputational risk

Main Stakeholders Invested in SPM

• Investors, MIVs, and Donors invest in SPM to:

• Ensure they invest in social institutions

• Get data, not stories• Get data, not stories

� Preempt problems & attract and retain clients

� Attract & report to their own investors

� Avoid reputational risk

Main Stakeholders Invested in SPM

� Microfinance Associations invest in SPM to:

� Offer the most appropriate and relevant information and training to member MFIsand training to member MFIs

� Offer assistance with SP reporting

� Offer technical assistance for SPM

� Assist members in developing tools and codes of conduct

� Ensure that the local industry keeps/develops a client focus

Intent & Design

Internal Systems/Activities

Outputs Outcomes

Dimensions of Social Performance

INTENT AND DESIGNWhat is the mission of the institution?

Does it have clear social objectives?

Impact

IMPACTCan change in client welfare

INTERNAL SYSTEMS & ACTIVITIESWhat activities will the institution undertake to achieve its social mission?

Are systems designed and in place to achieve those objectives?

OUTPUTSDoes the institution serve poor and very poor people?

Are the products designed to meet their needs?

OUTCOMESHave clients experienced social and economic improvements?

client welfare be attributed

to institutional activities?

Intent & Design

Internal Systems/Activities

Outputs

Dimensions of Social Performance

Outputs

Outcomes

Impact

Assessing Social Performance

Process Results

Audit Tools:

Intent & Design

Internal Systems/Activities

Outputs Outcomes

Rating Tools: Client Data Tools:

Impact

Impact

EconometricAudit Tools:

CERISE SPI Tool

Quality Audit Tool

MicroSave SPM Audit

Global Reporting Initiative (GRI)

Rating Tools:

M-CRIL

MicroFinanza Rating

MicroRate

Planet Rating

Client Data Tools:

Progress Out of Poverty Index (PPI)

Poverty Assessment Tool (PAT)

Client measurement tools (e.g., satisfaction, dropout, food security,

focus groups)

Econometricstudies

Responsible Finance vs. Social Performance

Regulators &

Policymakers

Donors

RESPONSIBLE FINANCE

ER

FO

RM

AN

CE

Investors &

MIVs

Networks,

Associations, &

Support Orgs

Retail

Providers

(MFIs)Do No Harm Act Ethically

(Corporate

Citizenship)

Commit to

Positive Change

for Clients

SO

CIA

LP

ER

FO

RM

AN

CE

OVERLAP