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JUNE 2009

JUNE 2009. Social Performance Task Force – Madrid 2009 Social Performance Ratings. Presented by: Emmanuelle Javoy, Managing Director. Planet Rating 13 rue Dieumegard 93400 Saint Ouen France Tél : 33 1 49 21 26 30 – Fax : 33 1 49 21 26 27 contact@planetrating.com - www.planetrating.com.

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JUNE 2009

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  1. JUNE 2009 Social Performance Task Force – Madrid 2009Social Performance Ratings Presented by: Emmanuelle Javoy, Managing Director Planet Rating 13 rue Dieumegard 93400 Saint Ouen France Tél : 33 1 49 21 26 30 – Fax : 33 1 49 21 26 27 contact@planetrating.com - www.planetrating.com

  2. Planet Rating - What do we rate? • Our Social Ratings provide an opinion on the capacity of an MFI to achieve its social goals • It being understood that • the social mission of a Microfinance Institution should be In line with the broad mission of microfinance, i.e. “provide access to reliable financial services to those usually excluded from formal financial services” • A microfinance institution should be Socially Responsible and respect the fundamental rights of the different stakeholders (clients, staff, community in which it works, environment)

  3. Planet Rating - What do we rate? – Rating scale • Scale with strong emphasis on the evaluation of the Social Performance Management systems • Considered as a strong predictor of performance • Currently measurable and comparable • Information and evidence of performance needed to reach the higher levels of the scale

  4. Process in line with our usual rating process • We review and verify the information provided by the MFI • Manuals describing Processes, Procedures or Codes of Conduct, • Internal and external audits, • MIS information, • Surveys or research conducted by MFI partners And evaluate process and discuss performance through interviews with • MFI management • MFI staff • Clients (few) • MFI Partners and stakeholders (competitors, regulators, fund providers, etc.)

  5. Example: how do we rate « Depth of Outeach »? • Combination of information on • Credit Methodology (min and max loan amounts; requirements on collateral) • Strategy to choose the location of branches • Detailed data on geographical outreach (% of clients by districts matched with socio-economic characteristics of the districts) • Information on the distribution of all MFI branches across districts • Data taken from Credit Bureaus (« exclusive clientele ») • Any client-level data available at the MFI • Networks can help tremendously in making sure that this type of information is available and comparable for all MFIs in their country

  6. Example: how do we rate « Depth of Outeach »? • MFI 1 and 2 are likely to have a deeper outreach; • MFI 4 is likely to be reaching to less « excluded » clients • More information would be needed about MFI 5 to validate hints that the MFI is working with more remote clients

  7. Surveyors Survey Field work Survey Results Survey Preparation Longer term collaboration MFI Initial Needs Assessment Survey Monitoring Rating Preparation Ratingon-site mission Rating Agency Survey Company Selection 4 weeks 1-2 weeks 1 week 4 days 5 weeks Our version of the Social Rating with Survey • Survey conducted by an independent Survey Company • Process design to ensure • The Independence of the Rating Agency • The capacity Building of the MFI Staff • Use of local resources, allowing development of the sector and cost efficiency

  8. Full information on the Performance of the MFI • Rating designed to allow Investors to differentiate MFIs based on their social performance as well as on their financial performance

  9. Data input for Social Ratings Systems MISSurveysResearch Improve probability of good performance Document performance Benchmarks Evaluation Internal Audit Check the reliability of data and compliance with of procedures Rating Analyze and understand the reality behind the figures Compare performance across MFI Survey during the rating • Get a confirmation of performance on key items and guarantee standardized output information: • Characteristics of outreach • Client satisfaction • Client protection

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