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NOT DRAWN TO SCALE…..Mention different actorsRegulators & PolicymakersDonorsInvestors & MIVsNetworks, Associations, & Support Orgs Retail Providers (MFIs)This graph maps social performance. Notice that responsible finance forms a major part of social performance.Social Performance incorporates the elements of Responsible Finance, particularly at the retail level, but implies a greater level of responsibility to commit to positive change for clients. While responsible finance aims to create an enabling environment for clients to use microfinance effectively, social performance makes an express investment in positive change.This institutional commitment involves: 1) Investment in systems for double/triple bottom line management (which is aligning business processes to achieve both social and financial objectives. All aspects on an MFI’s operations affect whether it achieves its social goals, including staff training, incentives, Board composition, client feedback mechanisms and using this information to improve performance;2) Commit to measure and report client outcomes—for greater transparency in the industry; 3) Development of financial and non-financial services based on an assessment of client lifecycle needs and vulnerability of clients.
The starting point for the design of a seal of excellence in microfinance is to ask how can we start to think of ‘top performers’ in a different way. Not in terms of the number of borrowers and the return on assets of a MFI, but in terms of responsible finance, inclusion and effectiveness. Being a top performer in microfinance, means top performance in the ‘double bottom line’ – balancing financial and social goals. Both financial sustainability and social values are relevant and important. The SEAL has decided to focus their efforts on developing a SEAL for MFIs that are doing a particularly good job at poverty outreach and transformation. So they focused their effort on this aspect of social performance. But in order to get there, you have to pass the first two levels.How do you get there?Each level may be seen as a necessary step to the next level. Thus the SPTF standards include client protection. This seal of excellence will be for poverty outreach and transformation, with the universal standards for social performance and client protection a pre-requisite. A “double bottom line” seal, must also refer to financial sustainability. In other words, a seal of excellence in poverty outreach and transformation requires responsible and ethical practices at all levels of the institution, as well as a financially sustainable (or close to sustainable) bottom line.