MICROCAPITAL BRIEF: Social Performance Task Force (SPTF) Releases Proposed “Universal Standards for Social Performance” in Microfinance

The Social Performance Task Force (SPTF), an initiative set up in 2005 to improve the social performance management of microfinance institutions, released its proposed Universal Standards for Social Performance at its recent annual meeting in the Netherlands. The Universal Standards “define the guidelines and benchmarks that any double- or triple-bottom-line institutions should be accountable to.” SPTF defines social performance as “the effective translation of a microfinance organization’s mission into practice, in line with social values including serving more poor and excluded people sustainably.”

The Universal Standards that were proposed at the annual meeting are expected to “establish clear expectations for social performance and social performance reporting.” The standards cover the following areas: governance and staff commitment to social goals, client protection, products and services that meet client needs, social responsibility to staff, client monitoring and responsible financial performance. The reporting for each standard is organized into five categories: proposed standard, objective, benchmark/guideline, existing indicators and reference tools and resources. For a detailed listing of each standard you may visit: http://www.sptf.info/images/proposed_sptf_universal_standards_for_social_performance.xlsx

The presentation of the draft Universal Standards during SPTF’s annual meeting will be followed by the creation of working groups to further fine-tune the benchmarks and indicators based on the feedback received from meeting participants. The goal is to finalize the standards by December.  

As part of the discussions on the Universal Standards, SPTF initiated a debate among microfinance stakeholders about “how much private gain is appropriate for organizations serving the poor?” Some participants agreed that there “needs to be limit on how much profit we can make off the poor and still call ourselves social microfinance.” Others expressed concern that fixing standards might “invite caps.” A number of the participants argued for transparency rather than fixed standards opining that “transparency would allow the participants in the microfinance industry to make their own judgments about acceptable levels of profit.”

By Nisha Koul, Research Associate

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), Argidius Foundation and Ford Foundation. As of February 2011, SPTF consists of approximately 850 leaders from microfinance stakeholder groups including practitioners, donors and investors (multilateral, bilateral and private), national and regional networks, technical assistance providers, rating agencies, academics, researchers and others. 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:

SPTF Press Release, http://www.mftransparency.org/pages/wp-content/uploads/2011/06/Press-Release-Social-Performance-Task-Force-Annual-Meeting.pdf

Center for Financial Inclusion Blog, “How much profit is Responsible”, http://centerforfinancialinclusionblog.wordpress.com/2011/06/23/how-much-profit-is-%E2%80%9Cresponsible%E2%80%9D/

MicroCapital.org story, March 14, 2011: “MICROCAPITAL BRIEF: Associations Social Performance Working Group of Social Performance Task Force (SPTF) Authors “Donor Strategies for Advancing Social Performance through Microfinance Associations”, https://www.microcapital.org/microcapital-brief-associations-social-performance-working-group-of-social-performance-task-force-sptf-authors-%E2%80%9Cdonor-strategies-for-advancing-social-performance-through-microfinance-associ/

MicroCapital.org story, February 28, 2011: “MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Eases Access to Social Performance Data of Microfinance Institutions (MFIs), Announces 11 Social Performance Indicators in Conjunction With Social Performance Task Force (SPTF)”, https://www.microcapital.org/microcapital-brief-microfinance-information-exchange-mix-eases-access-to-social-performance-data-of-microfinance-institutions-mfis-announces-11-social-performance-indicators-in-conjunction-with/

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

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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