10 July 2012 – Mexico City

Social Performance

Agenda

1. Timeline and Structure of Social Performance

2. External SP Initiatives

3. FINCA’s Definition and Measurement of Social Performance

4. Social Performance Targets (Pilot Countries)

5. Empowerment and Aspirations

6. Corporate Social Responsibility

7. Institutionalization of Social Performance at FINCA

3

Expanded access to financial services, primarily among underserved, low-income communities.

Increased employment and incomes

Improved living standards

Empowerment and the acheivement of personal aspirations among our clients and their families.

Acting responsibly and equitably towards all stakeholders and the communities of which we are a part.

FINCA’s Definition of Social Performance

Long-Term Timeline

Definition &

Sources

Metrics,

Monitoring

System:

Opa Buy-in

Plan for 2012

Initial

baselines

Finalize metrics,

monitoring tools,

staffing, and

budget

Resolve outstanding

definitions and

finalize monitoring

tools.

Training

Set Targets, develop strategies sand

incentives

Stage II

2013 Stage III

2014

Review Results,

Refine Tools

Test reporting tools

`

Complete 2012

Establish operative

baselines

5

Proposed SP Reporting Structure

Social & Environmental Officer

FI Board

SP Officer

-Loan Files

-Surveys

-Operating Reports

Subsidiary

External Stakeholders

Customer Data

Warehouse

SPAC

NBD

FINCA International

Em

plo

ym

en

t &

Inc

om

e D

ata

FMH

External SP Initiatives

See Appendix 1 for more detail.

Social Performance

Matching External and Internal Standards

EXTERNAL - SPTF, Ratings INTERNAL

INTERNAL - SPAC, MT

STANDARDS&

METRICS

SP “Triple Crown” Initiatives

For every financial provider

– “do no harm”

For double or triple bottom line

organizations

For organizations with specific

stated mission of poverty

reduction and/or transformation

Modified from : Rhyne, Elisabeth, Daley-Harris, Sam Wardle, & Leah Nedderman.

Is Microfinance Ready for Social Performance Certification? USAID, 4 May 2011.

Smart Campaign CPPs

(includes MF Transparency)

SPTF

Universal

Standards

MCSCS

eal

SMART Client Protection Principles

1. Appropriate product design and delivery

2. Prevention of over-indebtedness

3. Transparency

4. Responsible pricing

5. Fair and respectful treatment of clients

6. Privacy of client data

7. Mechanisms for complaint resolution

9

SPTF – Universal Standards

• Standards being developed with CERISE, MF Transparency MIX Market and SMART Campaign as well as SPTF Membership

• Cover both social performance and social performance reporting

• Standards proposed for the following categories: • governance and staff commitment• client protection (adopts the SMART principles)• products and services that meet client needs• social responsibility to staff• client monitoring and • responsible financial performance.

10

Universal Standards (cont’d)

• The Standards would not enforced by the SPTF• External evaluation and certification may be filled by:

* Social raters and auditors* Investors and donors* Networks and associations* Other organizations performing social performance appraisals.

• Initial comment period ended 7 June.

• SPTF Annual Meetings & Working Groups in June

• MFI Network roundtable on metrics proposed for July.

11

SPI Reporting Requirements

STAFFING• All subsidiaries designate a point of contact for SPI reporting. • FCAT 2.0 countries - assign one person to manage the survey• Research Fellows for 2012

Topic Reporting Tools Frequency Notes

Outreach and Access

Finstats Monthly Modified to include metrics such as urban/rural outreach

Product Survey Annual 2012 Survey – Fall

Income And Employment

Pilot SPI Reporting OngoingFCAT conducted in June through August managed by subsidiary staff or Research FellowsFCAT 2.0 Annual

Corporate Social Responsibility CSR Survey Annual CSR standards and survey to be

developed

SPI Data Requirements

• Only FCAT 2.0 or Pilot SPI Reporting framework• Random and representative sample• Sampling plans approved prior to research • Minimum of 350 clients for FCAT 2.0 surveys• Approved surveyors – not loan officers• Data matched to the format provided• 100% Client ID numbers• Data verified through spot checks and quality controls. • Data properly cleaned, 95% of the data is free from errors• Subsidiary Internal Audit shall include SPI data collection and reporting

in their annual work plan

2011 Outreach & Access Report

Total Outreach, Percent Female

15

Percentage of women borrowers.

2011 ACCESS AND OUTREACH REPORT

Source: FinTracks Outreach reports.

Rural Penetration is Highest in Latin America

URBAN (NATIONAL OR REGIONAL CAPITAL, DAILY MARKETS, LIMITED OR NO LAND AVAILABLE FOR GROWING OR RAISING LIVESTOCK)

PERI-URBAN (OUTSKIRTS OF NATIONAL OR REGIONAL CAPITAL, LIMITED GARDENING AND LIVESTOCK ACTIVITIES)

RURAL (WEEKLY MARKETS, MAJOR DEPENDENCE ON HOME-GROWN FOOD AND LIVESTOCK

2011 ACCESS AND OUTREACH REPORT

Source: 2011 FCAT survey data except Afghanistan (2006) Haiti (2007) Nicaragua (2009) and Uganda (2010.)

Client Age Distributions

Less than 2% of all FINCA clients are over age 65.

2011 ACCESS AND OUTREACH REPORT