>Posted by Meghan Greene
Last month, microfinance stakeholders from around the world gathered at the Dead Sea in Jordan to mark the launch of the Universal Standards for Social Performance Management, the culmination of 18 months of effort by hundreds of industry experts, led by the Social Performance Task Force.
The Universal Standards are management standards relevant to all microfinance institutions pursuing a double bottom line. The Standards cover six categories, with topics like “Define and Monitor Social Goals” and “Ensure Board, Management, and Employee Commitment to Social Performance.” They outline the essential practices organizations must have in order to achieve strong social performance management.
The Standards are based on the belief that “we can only manage what we measure,” so in order to achieve our social performance goals, we must actively measure and monitor our progress. The Standards are intended to help institutions elevate the profile of social performance to that of financial performance, so institutions can actively manage toward both goals.
Many hours and much thought have gone into the development of these Standards, with the SPTF soliciting feedback through several industry-wide comment periods. However, the Standards presently exist primarily on paper – they have not yet been road tested in MFIs themselves. Therefore, many questions remain: How do we assess our institution against the Standards? Are some standards more difficult to assess than others? Are they specific enough, or overly prescriptive? And most importantly: How do we use the information an assessment reveals to improve our practices?
With this in mind, the members of the Microfinance CEO Working Group (which consists of the CEOs of leading organizations Accion, FINCA, Freedom from Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer, VisionFund International, and Women’s World Banking) have committed to working with a number of their member institutions to “beta test” the Standards. In other words, they will be supporting these partners to self-assess against the Standards. After answering the question “How are we doing?,” the MFI can then determine “How can we do better?” A self-assessment may reveal some quick wins as well as major challenges that require significant cultural or operational overhaul.
The Standards are intended to evolve continually, building on the most current knowledge and understanding of social performance management. Over time, it’s expected that the industry will develop benchmarks and standards for client outcomes. Through working with their member institutions, sharing knowledge among Microfinance CEO Working Group members and with the SPTF, the Working Group hopes it can help advance the understanding of the Standards in action, and build long-term commitment to their implementation throughout the industry. As Rupert Scofield, President and CEO of FINCA and Co-chair of the Microfinance CEO Working Group, said during the SPTF meeting, “While we may be competitors in some markets and settings, when it comes to this topic what is good for one is good for all.”
Image credit: Social Performance Task Force
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