MICROCAPITAL BRIEF: Banco De La Gente Emprendedora (BanGente) Hosts Fifth International Microfinance Forum in Caracas, Venezuela to Review “Universal Standards for Social Performance Management”

Banco De La Gente Emprendedora (BanGente), a Venezuela-based financial services organization, recently hosted the Fifth International Microfinance Forum in Caracas, Venezuela, to study the enforcement and monitoring of the Universal Standards for Social Performance Management (USSPM), a manual designed in June 2012 by the US- and Switzerland-based working group Social Performance Task Force (SPTF) that lists six practices microfinance institutions (MFIs) may adopt in order to expand their focus from financial to social goals [1]. MFIs that voluntarily signed up for and promise to follow USSPM use the standards to informally asses their current level of social performance management and then guide and self-regulate their own strategies for improvement. These are the six standards [2]:

  1. Define and monitor social goals
  2. Ensure board, management and employee commitment to social goals
  3. Treat clients responsibly
  4. Design products, services, delivery models and channels that meet clients’ needs and preferences
  5. Treat employees responsibly
  6. Balance financial and social performance

The forum consisted of various representatives of MFIs from around the world that have committed to adhere to the standards set forth by USSPM. Laure Foose, the director of SPTF, praised USSPM for helping to “reboot” the microfinance industry by building “incredible momentum around ensuring that the client” – and not just money or financial gains – “is at the center of our work.”

Other practitioners also praised USSM. Adela Sagastume, planning and marketing manager for the Guatemala-based MFI Génesis Empresarial, lauded the standards for stipulating “clear concepts and well-defined goals” that have enabled boards, human resources, marketing, client services and the finance sector to all “create a convergence of efforts and purposes.”

Mario Medina, head of social assets projects for the Peru-based financial services firm Mibanco and one of the speakers at the forum, explained that by better measuring social objectives, USSPM has “opened a new and wide spectrum of aspects” for the improvement of the “people’s benefit.”

Professionals also offered suggestions for improvement upon the standards. Micaela McCandless, coordinator of USSPM activities for the US-based MFI Accion, cautioned that while the standards addressed the need for “balancing [both] financial and social performance,” they should be used for management practices and not for social results. She also expressed hope that the standards will be improved upon in the future by including universal data to monitor and define standards for client impact [1].

As of 2011, BanGente reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 138 million, a gross loan portfolio of USD 122 million, total deposits of USD 88.1 million, return on assets (ROA) of 4.06 percent, return on equity (ROE) of 44.8 percent, approximately 55,000 active borrowers and 102,000 depositors. As of 2012, SPTF has partnerships with approximately 1,300 members from microfinance stakeholder groups including practitioners, donors, investors, national and regional networks, technical assistance providers, rating agencies, academics and researchers.

By Michael Averell, Research Associate

About Banco De La Gente Emprendedora (BanGente)

Established in 1998, Banco De La Gente Emprendedora (BanGente) is a Venezuela-based financial services organization that specializes in working with low-income Venezuelans without access to credit or formal banking. As of 2011, BanGente reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 138 million, a gross loan portfolio of USD 122 million, total deposits of USD 88.1 million, return on assets (ROA) of 4.06 percent, return on equity (ROE) of 44.8 percent, approximately 55,000 active borrowers and 102,000 depositors.

About Social Performance Task Force (SPTF)

The Social Performance Task Force (SPTF) was created in 2005 as an initiative of CGAP (Consultative Group to Assist the Poor), Switzerland’s Argidius Foundation and the US-based Ford Foundation. As of 2012, SPTF consists of approximately 1,300 members from microfinance stakeholder groups including practitioners, donors, investors, national and regional networks, technical assistance providers, rating agencies, academics and researchers. It has been charged with clearly defining social performance and addressing questions about measuring and managing social performance. According to SPTF, social performance includes operating “in line with accepted social values that relate to serving larger numbers of poor and excluded people.”

Sources and Additional Resources

[1] Independent European Daily Express (IEDE): “Ensuring Microcredit’s Primary Goal Is Changing Lives,” http://www.iede.co.uk/news/2013_2546/ensuring-microcredits-primary-goal-changing-lives

[2] Social Performance Task Force (SPTF): “The Universal Standards for Social Performance Management,” http://www.sptf.info/spmstandards/universal-standards

MicroCapital story, May 31, 2013, “MICROCAPITAL EVENT: 3rd Latin American Forum on Social Performance: Responsible Finances and Development, June 3-4, 2013, Panama City,” https://www.microcapital.org/microcapital-event-3rd-latin-american-forum-on-social-performance-responsible-finances-and-development-june-3-4-2013-panama-city/

MicroCapital story, April 2, 2013, “MICROCAPITAL BRIEF: Social Performance Task Force (SPTF) Calls for Survey Submissions by April 5, 2013,” https://www.microcapital.org/microcapital-brief-social-performance-task-force-sptf-calls-for-survey-submissions-by-april-5-2013/

MicroCapital story, November 6, 2010, “MICROCAPITAL BRIEF: Venezuela to Implement Universal and Microfinance Banking and De-Commercialize Current Financial System,” https://www.microcapital.org/microcapital-brief-venezuela-to-implement-universal-and-microfinance-banking-and-de-commercialize-current-financial-system/

MicroCapital Universe Profile: Banco De La Gente Emprendedora (BanGente) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangente

MicroCapital Universe Profile: Social Performance Task Force (SPTF) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Social+Performance+Task+Force

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