Seal of Excellence for Poverty Outreach and Transformation in Microfinance - Indicators A. Background Data - Country Dimensions Indicators 1. Country Development / - National poverty line - in local Poverty Profile National currency/household (HH)/month data, Progress out of - - % HHS below national poverty line poverty (PPI) docs - Source and date of data - Data by relevant international poverty lines ($1.25 - $5 at purchasing power parity - PPP) - each poverty line - local currency/HH/month and % HHs below line 2. Human Development - health, education, other Index (HDI) ranking, key - Per Capita Gross National income development indicators (GNI), date 3. Regional Development - More developed/less developed regions within country Vulnerable Communities - As identified for the country - with % of households B. Background Data – Financial Institution Dimensions Indicators 1. Organization - Legal Form - Year started 2. Services - List of Financial Services - List other Services or linkages 3. Scale - Clients – Borrowers - Borrowers previous year Members/Borrowers/Savers - % growth - Portfolio ($) (mn) - Portfolio ($) previous year (mn) - % growth 4. Model - % group borrowers - % individual borrowers 5. Geographic area - % rural borrowers - % urban borrowers 6. Women clients - % women clients 7. Women staff - % women on the Board, management team, and field staff 8. Mission, Statement Mentions:
-
Serving poor people (Y=1) Serving low income people (Y=1) Poverty Reduction (Y=1) Other Developmental Objectives: employment, improved quality of life, reduced vulnerability, women's empowerment, health ….
Note Context to assess potential outreach of microfinance in the country and reference to product size
Identifies poorest countries
Note Descriptive profile Reference for later analysis
1. Qualifying Standards Dimensions 1.0 Financial Sustainability
Indicators - Accounts externally audited in last 2 years - Return on Assets (RoA) – positive - Portfolio yield - reasonable - Operating Expense Ratio – indication of costs - Financial Expense Ratio – cost of funds for onlending - Portfolio at Risk (PAR) - 30 days SPTF minimum Universal Standards 1.1 Define and monitor - Indicators under development target clients and social through Smart Campaign and Social goals Performance Task Force 1.2 Ensure Board, Management and Employee Commitment to Social performance 1.3 Protect Clients' Rights 1.4 Design products, services, delivery models and channels that respond to clients' needs and preferences 1.5 Treat Employees Responsibly 1.6 Balance Social and Financial Returns
Note Indicate self reported vs. rated data
Select key standards as qualifying for the Seal
2. Seal Standards – Include Poor Households Dimensions 2.0 Intent – poverty outreach
2.1 Practices that Support Poverty Outreach
2.2 Poverty Measurement – entry clients
2.3 Results - poverty outreach at entry benchmarked (as relevant for country) Other Quality of Life Indicators Outreach to Vulnerable Communities
Indicators - In stating intent to serve the poor or low income, the MFI refers to a level which includes the bottom 40% of households in the country - Location of offices - % in underserved, remote areas; regions with above average poverty rates (ref A.3) - % clients in these regions - Addressing staff biases (e.g. to poor, marginalised groups) through culture and incentives - Addressing bias in group selfselection - Timing of meetings for groups (adaptation to suit poorer clients) - Fees – minimal - Type of collateral - manageable by poor people: % borrowers without collateral, requirements in the application process - e.g. registration docs) - Including start ups for enterprise lending (% startups of total enterprises funded in previous year) - First loan size as % per cap GNI - First deposit size as % per cap GNI - MFI measures regularly as part of own operations? (Y=1) - Tool/indicators - Verification of quality of data collection - and checks in place - Assessment of reports, who accesses, are reports used to adapt approach and services
-
%<National poverty line % <$1.25 at PPP % < $2.5 at PPP % < $5 at PPP (or significant number) Profile of entry level clients on selected indicators % clients (all) from such communities
Note
The MFI has identified the barriers of poor people to entry, and designed its entry requirements to address those barriers
Guidelines may be around: <20% per cap GNI <1% per cap GNI
Tools include: PPI, Poverty Assessment Tool (PAT), food security index, other indicators of vulnerable communities Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services Reference Background (A.1) Reference – level that reflects the bottom 40% of households in the country Reference Background (A.3) Reference Background (A.3)
3. Seal Standards – Appropriate and Quality Financial Services Dimensions 3.0 Financial products and services adapted to known needs and preferences of poor clients
3.1 Protection for vulnerability
3.2 Monitoring and use of client feedback
3.3 Tracking and use of information about client exit
Indicators - Product design (not just enterprise credit) reflects understanding of cash flows and livelihoods of poor households: examples of products, services or adaptations to serve the needs of poor clients, at entry and over time - Access analysis - % clients accessing different products - Systems to distinguish 'can't pays' from 'won't pays' and appropriate responses in arrears management (not just zero tolerance of delinquency) - Rescheduling of loans in circumstances of catastrophe guidelines and documentation - Savings products for emergencies % clients - Insurance products that respond to most important risks for poor clients - % clients - Regular mechanism to monitor client feedback - Describe mechanism (including who, frequency, sampling ...) - Results/findings - % clients satisfied, analysed for poor clients - Who uses the results - Uses feedback to improve products and services Examples of such use - Periodically tracks reasons for client exit, including analysis for poor clients - Uses results to improve services If MIS allows: - tracks client retention or exit rates; analyses rates for poor clients; - % exit within ‘acceptable’ range
Note E.g. Market research/feedback conducted and analysed to highlight requirements of poor households; product design responds to these requirements, with adaptation to different needs at different stages Practices to recognise and support clients through situations of vulnerability
Disaggregate data men/women as relevant Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services
4 Seal Standards – Appropriate non-financial services (option – with own delivery or linkage) Dimensions 4.0 Strategic selection of Non Financial Services (NFS)
Indicators - Basis for MFI identifying this NFS
-
4.1 Access and quality of non-financial services
-
-
Permanence/regularity of the service offered: Grant funds? Allocation of own resources - % profits, staff time #/% clients in past one year – significant access (guideline min 25%, though this may vary depending on type of NFS) Regular mechanism to monitor client feedback and value of services Feedback results - % satisfaction Who uses the results Use of feedback to improve services Examples of such use
Note
Repeat for different NFS as applicable Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services
5 Seal Standards – Change over Time Dimensions 5.0 Measures change over time - indicators of poverty reduction, transformation
Indicators - Describe mechanism (including agency, sampling, frequency ...) - Results/findings – positive trend, for clients poor at entry - Uses results to improve products and services? Examples of such use
Note (credible method and analysis, not necessarily Randomised Control Trials RCT) Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services
6 Seal Standards â&#x20AC;&#x201C; Additional values Dimensions 6.0 Gender Equity MFI Responsive to Gender Concerns
6.1 Client Voice in Governance Effective client role in guiding the institution whether as owners (cooperatives) or through other membership or representational structures
Indicators Note - Gender profile â&#x20AC;&#x201C; staff and clients ref Background B6 and B7 - MFI disaggregates data on dimensions of standards above for men/women clients (as relevant) - MFI monitors loan pass by women clients - % loan pass - % loan pass (by women clients) - gender assessments/evaluations findings and use - Effective cooperative structure - Effective mechanisms in other type of structures - Clients contribute to determining policies, ensuring appropriate products and services; have a part in decisions to allocate profits.