Mary Jo Kochendorfer, on right, at AFMIN Annual Conference in Uganda.

This post by Mary Jo Kochendorfer was originally published on the Progress out of Poverty blog. Progress out of Poverty is an initiative of the Grameen Foundation that assists microfinance institutions and other organizations measure and track the poverty levels of groups and individuals, and in turn better manage their programs.

This past summer, the microfinance industry recently celebrated a milestone when the Social Performance Task Force (SPTF) released the Universal Standards of Social Performance Management (USSPM) after a worldwide consensus-building effort. After much work and collaboration, the microfinance industry, by way of the SPTF, came together and put forth standards which outline the best practices for monitoring and managing social performance. The SPTF defines social performance as “the effective translation of an institution’s social mission into practice in line with accepted social values.” Following the SPTF annual meeting back in June, regional microfinance networks have also prioritized social performance in their agendas.

Last month, the Africa Microfinance Network (AFMIN) hosted its annual conference in Kampala, Uganda to discuss “the State-of-the-Practice of Social Performance Management in Africa.” While there, I participated in a panel on Poverty Measurement Tools along with colleagues from Caurie-Microfinance, VisionFund International and CGAP.

(Got 15 minutes? Watch my presentation on poverty measurement with the PPI.)

It was exciting to see that so many organizations are interested and currently embarking on measuring poverty of their clients. For me, one of the highlights was listening to Alex Counts, CEO of Grameen Foundation, speak on the importance of putting clients first and the role of CEOs. During his speech he made a compelling argument for organizations to embrace the Universal Standards and take action.

“The time of ‘letting a thousand flowers bloom’ is ending,” Alex said, alluding to the ways in which the microfinance industry has approached the subject of social performance management. “We no longer have that luxury. We must unite and work together to use these standards and improve them through our experiences.” Rather than each institution defining its own SPM approach and practices, we can finally unite behind the standards.

Why the urgency? Alex highlighted that over the past few years, the entire microfinance industry has fallen into controversy thanks to the mistakes of a few microfinance institutions (MFIs) that neglected – or altogether abandoned – the mission to help the poor. Though these institutions are not representative of the majority of the worldwide microfinance industry, they have damaged the industry’s reputation and undermined the work of MFIs that are committed to a social mission. The USSPM are a clear and practical response to this crisis.

Alex challenged professionals at AFMIN to demonstrate their commitment to social performance by staying honest and pro-active. Specifically, Alex urged CEOs to both adopt and assess the standards, stressing that there is power in collective action. Grameen Foundation, as a member of the Microfinance CEO Working Group, will work with partner organizations to ‘beta test’ the standards.

To read the rest of this post, visit the Progress out of Poverty blog.

To learn more about the Microfinance CEO Working Group, visit their webpage. 

Image Credit: Grameen Foundation

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