Recursos

This brief aims to distill lessons from the last five years (2013-2017) implementing the Universal Standards. It draws on feedback from trainings, audits, and upgrade projects conducted under the two funding facilities created to promote responsible finance: the Social Performance Fund (SP Fund) and the Responsible Microfinance Facility (RMF). It also draws on responses from online surveys conducted by CERISE in early 2018 with 22 FSPs, 12 investors, 80 SPI4 qualified auditors6 and 7 national networks7. In addition, the analysis integrates feedback from investors at the SPTF Social Investor working group meetings (India, February 2018 and Luxembourg, June 2018), on how in general the Universal Standards can shape and strengthen investors’ operations and strategies for responsible investment. CERISE, MFC and SPTF have coordinated the analysis, based on their direct involvement in the management or support of SPI4 users.

This issue of European Dialogue is a follow up to the 2008 issue, “The Role of Investors in Promoting Social Performance”. The 2008 issue set out to take stock of investment funds' practices in terms of promoting and assessing social performance. In the last two years, practices have become more systematic and refined, as social performance assessments of MFIs have become commonplace. The time has come to see how far we've come to “Making Microfinance Investment Responsible”. What are investors doing to systematize social performance management at the MFI level, and what are they doing to improve their own practices as responsible investors?

Brief No. 2 from the e-MFP Brief Series explores examples of the increasing role microfinance investment funds (MIVs) are playing to improve governance, both across the sector through investor coordination, and at the MFI level through operational tools. The Brief focuses on the microfinance sector's renewed commitment to the double bottom line. MIVs are collecting more social performance data than ever before. This enthusiasm, however, does not reduce the risks that MFIs face. Strong governance would help decrease such risks. MIVs play an important role in governance. They carry considerable weight at the sector level, channeling USD eight billion in investments to MFIs worldwide. They have the potential to influence strategy and operations at the MFI-level. Examples in the Brief include: GCAMF and Triple Jump conducted joint due diligence and proposed a syndicated loan to MFI MBK Ventura in Indonesia; ADA and PlaNIS-responsAbility conducted joint due diligence of ProMujer in Argentina; ResponAbility, Triodos, and the Council of Microfinance Equity Funds are co-financing a research team to explore over-indebtedness;

Chart showing Satya Microcapital's mission, social goals, SMART objectives and indicators.