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International Fund for Agricultural Development and the Microfinance Information eXchange:. Improving Donor Effectiveness in Microfinance Through Innovative Performance Monitoring. Jamie Anderson International Fund for Agricultural Development
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International Fund for Agricultural Development and the Microfinance Information eXchange: Improving Donor Effectiveness in Microfinance Through Innovative Performance Monitoring Jamie Anderson International Fund for Agricultural Development Rural Finance Consultant, Technical Advisory Division 15 November 2005
Overview • IFAD and rural finance • The MIX and the MIX Market • The IFAD and MIX collaboration • Questions and discussion
IFAD and rural finance • Donor agency of the United Nations • IFAD Mission: Enabling the rural poor to overcome poverty • IFAD loan portfolio: US$2.5 billion • IFAD loan portfolio, rural finance: US$744 million, approximately 30% of the total loan portfolio
IFAD and performance monitoring:Results and Impact Management System • Strong recommendation from the Microfinance Donor Peer Review and the Independent External Evaluation: Improve performance monitoring • RIMS: Results and Impact Management System • Approved by the IFAD Executive Board in 2003 • IFAD loans approved since January 2004 are required to report RIMS indicators annually
IFAD RIMS indicators for rural finance * Disaggregated by gender
What is the Microfinance Information eXchange? • MIX Mission • Build the microfinance market infrastructure by offering data sourcing, benchmarking and monitoring tools, as well as specialized information services • Primary MIX Activities • Standardize financial reporting across the microfinance industry • Provide a leading benchmarking service • Offer a reliable, open information marketplace—the MIX Market—to facilitate the exchange of quality data
What is the MIX Market? • Global, web-based, microfinance database that currently provides information on: • 598 microfinance institutions (MFIs) worldwide • 70 public and private investors in microfinance • 119 other actors in the microfinance sector, including MFI networks, raters, advisory firms, and governmental and regulatory agencies http://mixmarket.org
How do MFIs benefit from the MIX Market? • Use performance information to make decisions on day-to-day management and overall strategy • Attract additional donors and investors • Benchmark institutional performance against MFI peers • Highlight technical assistance and capacity building needs
The IFAD and MIX collaboration:Rationale and innovative features • Improve performance monitoring of IFAD-supported MFIs, via their participation in the MIX Market • MIX Market is the only global, decentralized MF database • Harmonize IFAD performance reporting requirements with other donors • IFAD was the first donor to partner with the MIX • Increase transparency and comparability in the microfinance sector and attract additional capital • Transparent, standardized info for MF investors on risk and return • Improve and standardize performance monitoring for the various models of financial services • Shift from “activity-based” to “performance-based” reporting
The IFAD and MIX collaboration:Timeline • Phase I: January 2004 – June 2005 • Pilot performance reporting in IFAD rural finance portfolio in Latin America and West Africa divisions • Phase II: June 2005 – June 2006 • Upscale performance reporting throughout IFAD rural finance portfolio in all regional divisions • Phase III: July 2006 – December 2008 • Mainstream performance reporting across financial service models throughout IFAD rural finance portfolio
The IFAD and MIX collaboration:Bangladesh • Process • In June 2005, a consultant began working with PKSF, the national microfinance network in Bangladesh, and its member MFIs • Objective: Determine how to bridge the indicators collected by PKSF with international reporting standards and the MIX Market • Results • All 24 IFAD-supported MFIs are now participating in the MIX Market • An additional 20 non-IFAD-supported MFIs are also on the MIX Market now
Contact information Jamie Anderson International Fund for Agricultural Development Technical Advisory Division Rural Finance Consultant j.anderson@ifad.org