1. Combining social and
financial performance: A
paradox?
Florent Bédécarrats-CERISE
Industrialized Country Tracks Sessions
Microcredit Summit Valladolid Nov. 15th 2011

2. Background
 CERISE: practitionners and researcher
network created in 1998 by CIDR, GRET,
IRAM, CIRAD & IRC
 Creating and disseminating knowledge
on impact, social performance,
governance & rural finance
 Pionnering social performance
assessment and management since
2001, founding member of Social
Performance Task Force
 Animating ProsperA, Alliance for
promotion of social performance: MFIs,
networks, investors and donnors
www.cerise-microfinance.org

3. Why bother about the links
between social and financial
performance?
 This question has always been at the heart of
microfinance promise and remains key for
practitionners
 Research was lacking adequate data and
drew approximate conclusion on inadequate
data (eg. %of women, average loan size…)
 Idea of a systematic trade-off = conventional
wisdom partial understanding of SP
 New understanding thanks to widespreading
social assessments: CERISE-SPI, MIX,
Social ratings, evaluations by ethical
investors…
 In reality, few oppositions and several
synergies useful for piloting MFIs
www.cerise-microfinance.org

4. How do we assess social
performance?  SPIinternal or external
for
3.3: questionnaire
audit
T a rg e tin g th e p o o r  Created
a n d e x clu d e d ***
100%  Simple, can be a one
80% day process
60%  4 dimensions: 12
40% criteria, 71 indicators
S o cia l
20%
A d a p ta tio n
 Includes Smart
o f se rvice s** principles, MIX-SPTF
0%
re sp o n sib ility*
indicators, MF
Transparency
definitions,
 Compatible w. SPTF
B e n e fits fo r clie n ts***
universal standards,
Seal of excellence
 Currently 440 audits of
332 MFIs from 58
countries in CERISE’s
www.cerise-microfinance.org database

5. Whose social performance do
we assess?
ECA
CERISE: 14 MFIs (4%)
MIX: 189 MFIs (19%)
MENA MCS: 68 MFIs (2%)
CERISE: 12 MFIs (4%) Asia
MIX: 55 MFIs (5%) CERISE: 32 MFIs (10%)
MCS: 87 MFIs (3%) MIX: 287 MFIs (27%)
LAC Africa MCS: 1723 MFIs (49%)
CERISE: 189 MFIs (57%) CERISE: 84 MFIs (25%)
MIX: 347 MFIs (34%) MIX: 150 MFIs (15%)
MCS: 639 (18%) MCS: 981 MFIs (28%)
Latin America and Africa are more represented:
 commitment of networks & social investors
 governments challenging microfinance
www.cerise-microfinance.org

6. Whose social performance do
MIX
we assess? MIX CERISE
CERISE
(MFI type) Bank (MFI scale) (MFI Scale)
Bank (MFI type)
Credit 3% Large
7%
Union Credit Large Small 25%
NGO
14% Union 37% 35%
37% Small
NGO 30%
46%
50%
Medium
Rural Medium 29%
NBFI Rural NBFI
Bank 29%
36% Bank 16%
6%
1%
 Slightly more NGOs and Coops than
MIX
 More small MFIs
www.cerise-microfinance.org

7. What social performance results
D1.
Targeting
by type of MFI?
Bank C1.1
and outreach
80% NBFI Geographic
NGO Targeting
70% 100% C1.2
Credit Union C4.3 SR to
Individual
60% comm/env 80% Targeting
50% 60% C1.3 Pro-
C4.2 SR to
poor
40% clients
D2. 40% Methodology
D4. Social
30% Adaptation
responsibility 20%
of services
C4.1 SR to C2.1 Range
0%
staff of services
C3.3
C2.2 Quality
Empower-
of services
ment
D3. Benefits
C2.3
to clients C3.2 Client
Innovative
participation
and NFS
C3.1
 NGOs are targeting champions Economic
benefits
 Coops best in participation
 Banks on service adaptation and social responsibility
www.cerise-microfinance.org

8. Relationships
social/financial
Performance
 Trade offs:
◦ Individual targeting of
poverty
◦ Non financial services
◦ Client protection
 Synergies:
◦ Geog. targeting &
participation improve
productivity
◦ Quality of services &
reasonable interest rates
improve portfolio quality
◦ Service adaptation improve
www.cerise-microfinance.org
efficiency

9. Conclusion
 Double bottom line is no “mission
impossible”
 Can be achieved when trade-offs and
synergies are combined cleverly following
a well planned social performance
management strategy
 Such relationshimps can also evolve over
time (cf. Microfinanza’s study)
www.cerise-microfinance.org