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SPTF meeting Bern

SPTF meeting Bern. Session #5 Paul Luchtenburg AMK. Managing SP within AMK. Board Level Social Performance Committee Advisory and guidance function Assesses on SP in its 4 dimensions Outreach Demand driven products Client protection/ transparency Social responsibility

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SPTF meeting Bern

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  1. SPTF meeting Bern Session #5 Paul Luchtenburg AMK

  2. Managing SP within AMK • Board Level • Social Performance Committee • Advisory and guidance function • Assesses on SP in its 4 dimensions • Outreach • Demand driven products • Client protection/ transparency • Social responsibility • Management level • CEO and Various departments

  3. AMK org structure

  4. Objectives… Financial Social Overall SPM strategy for AMK ensure that… We are achieving our mission …and if not achieving it, how to best correct this We understand our clients and their needs We are helping (and not harming) clients and their families We have appropriate products and are continually improving our methodology Research information is made useful at every level SPM grows and evolves and AMK does

  5. Information Tools and checks for SPM • Client satisfaction surveys – likes and dislikes • Client exit surveys - Why and when clients leave • Client profile - Understanding the demographics and household cash flows • Impact assessment - any damage, lives improving? • Community surveys - understanding clients’ context • MIS information – wide info (possibly PPI in future) • Internal audit findings on information dissemination and transparency • Staff satisfaction surveys

  6. AMK: Program Costs • Staffed through in-house, independent Market + Social Research department, plus Audit , HR, and MIS <4% of total operating cost

  7. AMK: SPM Implications • Client level • Unbiased, relevant, timely feedback from clients (Know your client) • Guided new product development • Credit line • Emergency loans • Ensure that we are minimizing any harm to clients • Staff level • Lower turnover (6%) • Lender/ investor level • Attract investors and lenders who want a social return • Slightly cheaper loans from some social investors • International recognition • Shareholder level • Helps to ensure that AMK has broad and deep coverage

  8. AMK field Incentive • Client Officers, Area Mangers • Audit opinion - satisfactory • Repayment rate – > 97% • Number of clients – more than 500 • Interest income - • Area index - location difficulty • Population density – low – increased - census • % of poor clients – higher – increased - census • Propensity to disaster rates – higher – increased – WFP data • State of the infrastructure – bad – increased – visual • % of mono agriculture – higher – increased – census • Note: New branch or mature branch have different qualifications

  9. Summary • What seems to be working: • We know our clients • We maximize the inclusion of the poor into financial services • Know that current products are not harmful to clients • Transparency in transactions • Have Respectful behavior of staff towards clients • Challenges: • Growing and evolving SPM along with AMK • Keeping a strong SPM in a highly competitive marketplace • Staying profitable despite lean profit margins due to small avg. loan size

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