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Mission FirstSPM Advocacy in the Philippines

MICROFINANCE COUNCIL OF THE PHILIPPINES, INC. APRIL 2010

Mission FirstSPM Advocacy in the PhilippinesApril 2010 Jesila M. Ledesma Ma. Chona O. David-Casis Authors

Ma. Antonia K. Gonzalez Editor

Mina Lyn C. Peralta Lay-out Coordinator

MCPI Black and Silver Photos Photos

Copyright 2010 by the Micronance Council of the Philippines, Inc. All rights reserved. No part of this book maybe reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording or by an information and retrieval system, without permission from the publisher. Inquiries should be addressed to: The Micronance Council of the Philippines, Inc. Unit 1909, Jollibee Plaza Condiminium F. Ortigas Jr. Road, Ortigas Center Pasig City, Philippines secretariat@micronancecouncil.org www.micronancecouncil.org +632-6315920/ +632-6316184

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TABLE OF CONTENTSPage Tables and Figures Acronyms and Abbreviations Summary Part I Part II Chapter 1 Chapter 2 Introduction Social Performance Management in Micronance SPM in Brief MCPIs SPM Advocacy Program A. Core Programs to Promote SPM B. Partners and Stakeholders Part III Chapter 3 Chapter 4 Chapter 5 Milestones in SPM Advocacy SPM in Practice Driving Factors for SPM Emerging Results A. SPM in Practice B. SPM Advocacy Part IV Chapter 6 Chapter 7 Part V Challenges and Learnings Emerging Challenges in SPM Advocacy and Practice Recommendations from Stakeholders Conclusion iv v vi 1 2 3 5 6 12 13 14 23 26 27 28 30 32 33 34 35 36

Annex 1 References Annex 2 Key Informant Interviews

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Tables and Figures

Table No. 1 2

Title MCPI Training Workshops, 2006-2009 MFIs SPM Initiatives vis--vis the SPM Components

Page 8 21

Figure No. 1 2

Title Dimensions of Social Performance Social Performance Pathway

Page 3 4

Box 1 2 3 4 5

Title Ahon sa Hirap, Inc.: A Forerunner in Social Performance Management Alalay sa Kaunlaran, Inc.: Going Beyond Micronance BMCI and MMC: Promoting Social Performance Management within their Ranks Initial Successes: SPM in Practice How to Move SPM Forward: The Dilemma of NATCCO-MICOOP

Page 16 19 25 29 32

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Acronym and AbbreviationsAIMS APPEND ASHI ASKI BMCI Assessing the Impact of Microenterprise Services Alliance of Philippine Partners in Enterprise Development, Inc. Ahon sa Hirap, Inc. Alalay sa Kaunlaran, Inc. Bicol Micronance Council, Inc. Bridging Resources in Developing Greater Effectiveness of Social Enterprises CARD MRI Insurance Agency Center for Agriculture and Rural Development CARD Mutual Benet Association CARD Mutually Reinforcing Institutions Credit Background Investigation Capital Build-Up Center Chiefs Comit dEchange, de Rexion et dInformation sur les Systmes dEpargne-Crdit Community Economic Ventures, Inc. Consultative Group to Assist the Poorest CARD MRI Development Institute Catholic Organization for Relief and Development AID Catholic Relief Services Coalition of Social Development Organizations Coalition of Socially Responsible Small and Medium Enterprises in Asia Corporate Social Responsibility Focus Group Discussions Foundation for Rural and Industrial Equipment for National Development, Inc. Grameen Bank Grameen Foundation Interchurch Organization for Development Cooperation Imp-Act Consortium Key Result Areas Micronance Council of the Philippines, Inc. MFC MFI MICOOP MIS The Micronance Centre (MFC) for Central and Eastern Europe and the New Independent States Micronance Institution Micronance Innovations in Cooperatives Management Information System Micronance eXchange Market Mindanao Micronance Council, Inc. National Confederation of Cooperatives Non-Government Organization National Livelihood Support Fund Negros Women for Tomorrow Foundation Philippines-Australia Community Assistance Program Peoples Bank of Caraga Paglaum Multi-Purpose Cooperative Progress out of Poverty Index Quality Audit Tool Return on Equity Small Enterprise Education and Promotion Small and Medium Enterprises Services Provider and Capability Enhancer, Inc. Social Performance Indicator Social Performance Management Social Performance Management Peer Learning Community Social Performance Management Working Group Social Return on Investment Training of Facilitators Training of Mentors Training of Trainers VisionFund International Vision, Mission and Goals Vision, Mission and Objectives Word Vision International

BRIDGES CAMIA CARD CARD MBA CARD MRI CIBI CBU CCs

MIX Market MMC NATCCO NGO NLSF

NWTF PACAP PBC

CERISE

CEVI

PMPC PPI QAT ROE SEEP SMEs

CGAP CMDI CORDAID CRS

SPACE SPI SPM

CSDO CSR SME Asia CSR FGDs

SPM PLC SPM WG SROI ToF ToM ToT VFI VMG VMO WVI

FRIEND GB GF ICCO

Imp-Act KRAs MCPI

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Mission First.

Such is the call of Social Performance Management (SPM) to the micronance industry. Despite convincing growth from a nancial standpoint, the industry has yet to provide equally convincing evidences of improving the lives of a substantial number of the poor and the poorestits intended target groups. The push for a double bottom line in the micronance industry, which refers to both the nancial performance and the social performance of micronance institutions (MFIs), has never been stronger. In the Philippines, there is growing interest in SPM among industry players, propelled in large part by the Micronance Council of the Philippines, Inc. (MCPI). MCPI is a network of 44 micronance practitioners and allied service institutions, which is working toward the development of the micronance industry whose end goal is to reduce poverty in the country. Ever since MCPI launched its SPM Advocacy Program in 2002, it has reached out to at least 65 MFIs through a series of promotional workshops followed through by the more comprehensive SPM strategy workshops. It has developed a

core of local SPM trainers and mentors, equipped to conduct the SPM strategy workshop and perform social audits using the Quality Audit Tool (QAT). It entered into strategic partnerships with funders such as ICCO and CORDAID; with other networks such as Imp-Act Consortium and The Micronance Centre (MFC) for

Through a review of literature and the results of interviews with key stakeholders, namely, representatives from MCPI, 7 micronance institutions and SPM practitioners, 3 networks, and 4 support organizations engaged in SPM advocacy, the report further maps out how MFIs are integrating SPM into their organizations. It also identies the milestones and emerging challenges in SPM advocacy and practice. It hopes to shed useful insights on how SPM can be widely mainstreamed in the larger MFI community.

summary

Driving Forces Behind SPM Several factors facilitate the growth of SPM among MFIs in the Philippines. At the network level, MCPIs advocacy is rooted in the networks commitment to its social mission. The same social orientation drives other networks, such as BMCI and MMC, to encourage their member MFIs to focus on their social performance. Central and Eastern Europe and the New Independent States; and with regional networks of MFIs, Grameen Foundation, and Oikocredit, in its effort to widen the scope and depth of its advocacy. It formed Peer Learning Communities (PLC) among MFIs and resource institutions to create venues for active dialogue and address common concerns using shared resources. This report documents MCPIs industry-wide advocacy of SPM. Apart from the very strong social orientation of the MFI networks in the Philippines, a parallel drive exists among donors and social investors for greater accountability among MFIs, in terms of managing and reporting their social results. There is also a concomitant push for SPM from the global micronance industry and from several international networks (such as VFI), donors and support organizations (such as Grameen Foundation and Oikocredit), to have their local partners adopt SPM in their operations.

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summary

At the level of the MFIs, the driving forces behind SPM include: 1. The strong social orientation of micronance NGOs. Many MFIs in the Philippines started out as social development institutions.

Emerging Results A. Among the MFIs

In relation to SPMs essential components, the emerging trends in the MFIs current initiatives to 2. Pre-SPM social monitoring efforts. According pursue SPM are as follows: to almost all of the MFIs interviewed, even before SPM came about, they had been Component 1: Dening Social Goals, Objectives, and monitoring their social results using available Strategies tools. SPM added value to their efforts by providing a framework enabling them to 1. SPM has helped MFIs clarify their mission pursue social performance systematically and statements and translate these into social goals in consonance with their social mission, goals, and objectives conforming to SMART and objectives. principles. This is easier for micronance NGOs with a strong social orientation to do. A 3. The attainment of nancial sustainability by number of MFIs still nd it more challenging established MFIs. Having gained sustainability, to start with SPM as it requires them to dig established MFIs feel empowered to get into deep into their intent in getting into SPM using their own resources. micronance. 4. The MCPI SPM advocacy. Many of the MFIs interviewed attribute their interest in SPM to the advocacy efforts of MCPI. The initial exposure of the regional MFI networks, BMCI and MMC to SPM was through MCPI. 5. Exposure to SPM in conferences and workshops on micronance. The desire of MFIs to know what their colleagues in the industry are doingwhic