The Social Performance Task

Force

Update on what has been achieved so far and the key role of donors going forward

CGAP Annual Meeting Jurgen Hammer

Luxemburg, May 9th 2016

Agenda

• Setting Standards in Inclusive Finance - The SPTF and the Universal Standards for Social Performance Management

• Going from “intent” to “action” – A Tool to measure and report on Social Performance Management (the SPI4)

• Q&A

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• Global membership organization; +2,700 members in 127 countries – formalized organizational membership over 200 members

• Representing all stakeholder groups in the global responsible inclusive finance industry:

▫  financial service providers/MFIs

▫  donors and investors

▫  support organizations and networks

▫  rating agencies, regulators, etc

The SPTF is the global standard setting

body for responsible inclusive finance

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• Key role: establishing, disseminating, and promoting implementation of social performance management (SPM) standards

• Coordinating with other key initiatives –

▫  Smart, Cerise, MIX, Microfinance CEO working group, SP Implementation Fund for Networks

▫  ILO

▫  + larger impact: GIIN/IRIS, B-Lab/GIIRS

The SPTF is the global standard setting

body for responsible inclusive finance

There are 19 standards, organized into 6 dimensions

They incorporate learning from many initiatives in our sector

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• First launched in 2012, after an 18-month deep consultative process with stakeholders across the industry

• Being revised in 2016 ! Based on input from practitioners and experts, incorporating

updates of Smart Campaign and Cerise - coordinated timing of revisions

! All revisions overseen by a Technical Review Committee (TRC) of experts and approved by the SPTF Board

! Revisions incorporate new frontiers – DFS, environment, micro insurance – in terms of what is “universal” at this point in time

• Now stable for three years

Evolution of the Universal Standards

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• A comprehensive manual of best practices that helps financial service providers put customers at the center of all strategic and operational decisions ! Globally accepted standards ! Integrates best practices practices from leading

organizations (e.g., Smart Campaign, ILO)

The Universal Standards for Social

Performance Management

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1. Learn

2. Assess

3. Plan

4. Implement

5. Report

5 step framework for better practice –

Target: Financial Service Providers (FSPs)

•  Learn—Universal Standards Manual

•  Assess— Excel social audit (SPI4)

•  Plan—Action plan; prioritize gaps to address

•  Implement—Improving practices prioritized in the action plan

•  Report—Demonstrating results to internal or external stakeholders.

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•  The 2015 annual Universal Standards implementation survey1 showed continued increase in awareness and implementation ! 91% of stakeholders are ‘aware’, ‘familiar’ or ‘very familiar’

with the Universal Standards ! SPM change is happening – 74% of financial service

providers noted the Universal Standards influenced implementation of SPM practices; 47% mentioned having changed practices after leaning about the Universal Standards

! SPTF ranked as #1 place where to look for information, resources, and tools on SPM

State of Practice for Social Performance

Management

9 (1) Survey conducted by the SPTF in partnership with conducted the MIX, the Global Appeal for Responsible Microfinance, and Microcredit Summit Campaign, 400 respondents representing FSPs, investors, associations/networks, donors, assessment and rating agencies, etc

•  In the current revision period (2015-2016) donors played a key role in providing commentary and suggesting revisions to the standards: ! CGAP evaluated entire framework of the standards and proposed

new language to be inclusive of third party providers as well as key considerations for responsible DFS

! ILO reviewed the labor related standards and public comments received for Dimension 5 and worked with SPTF to develop practical revisions

! SDC emphasized the important role of insurance and other financial services. As a result SPTF consulted the MicroInsurance Center to review and suggest standards and practices.

Examples of Key Donor Input

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• While we are pleased with the progress and achievements, we still have much work to do for all FSPs across the industry to implement the Universal Standards

• Donors can play a key role ! Supporting and promoting the Universal Standards ! Supporting the infrastructure that promotes

transparency and accountability ! Participating in the Technical Review Committee (TRC)

of the Universal Standards to represent “new frontiers” in responsible inclusive finance for SPTF to monitor and incorporate in future revisions to ensure standards remain relevant

The Strategic Role of Donors

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Agenda

• Setting Standards in Inclusive Finance - The SPTF and the Unviersal Standards for Social Performance Management

• Going from “intent” to “action” – A Tool to measure and report on Social Performance Management (the SPI4)

• Q&A

•  Globally accepted social performance standards (Universal Standards)

•  Common social audit and monitoring tools for FSPs (SPI4) and for investors (SPI4 ALINUS) aligned with the the universal standards

•  Social ratings developed and conducted by third parties – also aligned with the standards

•  Outcome measuring and reporting guidelines for FSPs and investors and common social outcome indicators in specific areas (work to be presented in June and pilot tested in the field later this year)

Infrastructure in Place: Going from

Intent, to Action… to Measuring Impact

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The SPI4: A Universal Assessment tool

• Data collection and assessment tool aligned the Universal Standards

• As a free tool, it enables FSPs to analyze their current SPM practices in a way that fits their budget

• Can be customized to fit the institution’s mission • A reporting tool that allows FSPs to define their

“social statements”

For more information visit cerise-spi4.org 14

The SPI4: Why Should FSPs Use it?

Measure, manage and improve to

better serve clients! 15

The SPI4 ALINUS

•  ALINUS - ALigning INvestors due diligence with the Universal Standards

• The SPI4 ALINUS is a sub-set of the SPI4 tool, developed by a group of social investors – with just 80 common indicators

•  A tool for social due diligence and monitoring

•  Currently being piloted and implemented with a growing number of MFIs

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The process of definition of ALINUS

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SPI4 ALINUS: Why Should Investors Use it?

Simplify, convince, and support SPM!

Speak the same language

Reduce reporting burden for MFIs

Focus on analysis and not data

collection

Support partners in improving

SPM

Develop national and international

benchmarks

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The SPI4 ALINUS generic score card

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Agenda

• Setting Standards in Inclusive Finance - The SPTF and the Unviersal Standards for Social Performance Management

• Going from “intent” to “action” – A Tool to measure and report on Social Performance Management (the SPI4)

• Q&A

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Growing use of SPI4

SPI4innumbersasofFeb.2016

" Morethan115questionnairesreceived

" From50differentcountries

" 75%areaccompaniedself-assessments

" 333peopletrainedinSPI4

" 57qualifiedauditors

ASIA 26%

LAC 23%

MENA 5%

SSA 39%

ECA 6%

Audits SPI4 by region (N=116) (as of Feb 2016)

NGO24%

Bank11%NBFI

34%

Coop/CreditUnion21%

Other10%

bylegalform

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SPI4 benchmarks – Ex « FI Smile »

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The benchmarks for ALINUS

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Commitments at each stakeholder level

• Data collection with ALINUS

• Support MFIs in improving practices

• Define their “social statements”

• Use results to improve practices

• Pro-actively report to stakeholders

• Share results with CERISE

• Support MFIs in conducting assessments

• Support MFIs in improving practices

• Share results with CERISE

• Training, qualification, support

• Centralization of results • Database • Data verification (MFR) CERISE

SPTF MIX

Raters

Networks TA

providers

Investors Funders

Financial Institutio

ns

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Conclusion: the Ultimate Goal of our

work…..

Financial Performance

Social Performance

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Thank you!

Jurgen Hammer jurgenhammer@sptf.info