Social Performance Indicators
11.12.02
Dear Colleagues:
Given that many have already contributed to the
discussion, I consider it now useful and timely to reflect upon and share the
criteria, experience and outcomes
derived from the methods and instruments that measure the impact of
microfinance at the level of the clients of these organisations, and most
particularly for us to assess their social impact.
FINRURAL has instituted a service for evaluating
such impacts. The FINRURAL system is part of the ImpAct Programme supported by
the Ford Foundation and has the participation of three British universities,
Sussex, Sheffield and Bath. The service's methodological and instrumental
design has been developed by FINRURAL with the support of the ImpAct Programme,
and especially with the advice of Professor Paul Mosley from the University of
Sheffield. The purpose of the service is to identify the changes, either
positive or negative, produced by microfinance programmes for their customers.
Through reports authored by FINRURAL, the Service aims to provide timely and
objective information about the impact of financial services provided by
microfinance institutions (MFIs) to their customers. The service privileges
those methodological dimensions that yield outcomes with acceptable levels of
validity, trustworthiness and low cost.
This Impact Evaluation Service offers two types
of products. The first concerns the evaluation of the individual impact of the
MFI upon its customers and consists of a report that allows it to have
information extracted from the clients' perspective, which is useful for making
decisions regarding planing, strategy and development of products and financial
procedures. The "composite report" is the second type of document ,
which presents the overall impact produced by all the microfinance programmes
provided by the institutions using the service and presents the data supporting
political and strategic decisions, not only for these institutions but also for
private and public bodies associated with micro finances.
FINRURAL and its Impact Evaluation Service
currently provide the 8 financial institutions using the service with their
corresponding reports. These institutions include 4 NGOs (CRECER, FADES, PRO
MUJER, DIACONIA-FRIF), 2 Private Financial Funds (FFP FIE, FFP ECOFUTURO) and 2 Savings and Loan Associations,
TRINIDAD and COMARAPA. The selected approach is provided by the transversal
measurement method, which gathers information at a specific moment in time from
a sample of long-time customers (those who have been associated with the
financial institution for 2 or more years). At the same time, information is
collected from a comparison group comprised either of people who have not
participated in any microfinance programme, or people who have been
participating for less than 3 months.
There are three levels of evaluation: 1) either
the economic unit the client belongs to, or the group of companies, businesses
or economic activities in which the institution's customer participates; 2) The
family unit, or home, basically made up of all the people who share the same
roof and "cooking pot"; 3) The customer as an individual or person.
The most relevant indicators considered in the
impact evaluation at the level of the economic unit include: a) Income
generation measured via the indicators of average amounts of sales,
expenditures, earnings and the perception of change over the past year; b)
Investment via indicators such as the amount of work capital used, the monetary
value of the activity's productive assets and the perceptions of the changes in
work capital and investment; Also taken into account is the diversification of
the incomes via indicators such as the number of income-generating activities,
the participation in new markets or with new products and/or services. The
impact evaluation also takes into account variables related to employment,
using indicators such as the size of the work force, both salaried and
familiar.
To evaluate impact at the family level,
variables such as family income and their assets' value in the economic field
are taken into account. Inasmuch as the social aspect of the evaluation, the
degree of food security is taken into account by looking at whether the homes
have experienced either periods of food insecurity or changes in their
nutrition and visits to medical centres. Education is also taken into account
by looking at indicators such as attendance at educational centres, the maximum
level of education as measured by the ratio of minors and elders in the family.
On the other hand, home conditions indicators
are also taken into account, such as the household occupancy (degree of
crowding) ratio, the existence of basic utilities, and the presence of
improvements, repairs, or add-ons over the past year.
Lastly, on the personal level, variables such as self-esteem,
entrepreneurial and economic skills are looked at, which are measured via
indicators such as involvement in social, political or cultural organisations,
participation in family decisions, the existence of bookkeeping records, level
of personal income, among others.
As can be seen, we are working on evaluating
economic and social impacts, as well as the impact of empowering.
We would like to share our experiences and
visions with you and stimulate an extensive reflection about these issues.