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Bern, Switzerland, June 2010
Social Performance Management in
Strategic Planning
Héctor Madariaga Tapia
Agenda•Institutional Information: mission •Social Performance Management in Strategic Planning•Balance between social and financial objectives
Institutional Information
“Allow access to credit and development services to small and micro-
entrepreneurs in the rural sector so that they can improve their social and economic well-being, to that end,
FONDESURCO acts as a regulated microfinance entity”
Mission
Social Performance Management in
Strategic Planning (impact)
SPM in the Mission:•Dialogue between associates and the management team about the origin and goals of FONDESURCO•From a general mission to a more specific and reachable one. •From a general rural focus to a more segmented one: create a holding company for rural development (FONDESURCO, CAJASURCO, INVERSURCO, …) •From being an efficient institution (achieving good results) to being an effective one (complying with the social mission).•Challenge: Transformation while staying true to the social mission
SPM in Vision and Values:•Vision aligned with the social mission: “Leader, innovator, and example in rural microfinance for the sustainable development of Peru”•Values aligned with the social mission:
Dedication to the client, Innovation, Transparency, Social Responsibility, Passion, Commitment and Excellence
•Human capital investment is also aligned with the social mission.
SPM en Strategies:•From a growth strategy based on “demand” to a growth strategy based on “innovative supply”.•From a specific strategy based on “growth” to one based on “going deeper”.•From a strategy of complementary services based on “differentiation” to one based on “development services”.•From a competitive strategy of doing things “well” to doing them “excellently”.•From a strategy of building internal and external client “satisfaction” to one of building internal and external client “loyalty”.•From a financial focus to a development focus: “We don’t give loans, we give development”
SPM in Objectives:•5 perspectives: social, financial, clients, processes and, learning and human resources•Balance of 7 social objectives and 7 financial objectives •Balance between 28 indicators and forecasted goals•Objectives, indicators, goals, activities and/or projects aligned with social goals •Incorporation of indicators covering exclusion access, gender, poverty, satisfaction, innovation, market position, loyalty and development services.
Strategic Map - FONDESURCO (2010 - 2013)
So
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Cli
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2009 2010 2011 2012 2013
1% of clients who have shown an improvement in their social well-being (+ DS)
- - - - -
2N° of clients who have shown an improvement in their economic well-being (+ DS)
756 2,398 4,285 6,806 10,236
3 N° of clients who have received training 150 4,950 6,683 8,687 10,859
4 % of rural clients 94.00% 95.00% 95.00% 95.00% 95.00%
5 % of clients who are women 43.00% 47.00% 50.00% 52.00% 53.00%
6 % of clients who access credit for the first time 65.00% 65.00% 65.00% 65.00% 65.00%
7 % of clients who are poor 25.00% 27.00% 28.00% 28.00% 29.00%
3. Grow the credit portfolio 8 Credit portfolio (S/.) 35,958 53,538 72,276 93,959 117,449
4. Access financing for the continued growth of the gross loan portfolio
9 Available financing (S/.) 39,767 46,159 61,615 78,456 97,482
10 Eficiency: Operational costs/Average Gross Loan Portfolio (%)
14.62% 15.91% 16.17% 15.63% 15.47%
11 Profitability: Profits / Average Total Equity (%) 31.28% 30.28% 23.08% 24.66% 23.45%
12 Sustainability: Total Revenue/ Total Expenses (%) 121.26% 121.26% 120.04% 118.38% 119.42%
13 % Exclusivity 69.00% 71.00% 72.00% 73.00% 75.00%
14 % of desertion 15.23% 15.00% 15.00% 15.00% 15.00%
16 % who would recommend FONDESURCO 85.00% 86.00% 87.00% 88.00% 90.00%
17 % Market Position (Top of mind) 33.00% 35.00% 36.00% 38.00% 40.00%
18 % of Recollection of Brand (Awareness) 55.00% 56.00% 58.00% 60.00% 62.00%
9. Develop development services for clients19 Number of complimentary services developed 2 2 2 2 2
11. Develop integrated management based on risk 21 Risk rating C+ B- B- B+ B+
22 % Satisfaction of internal clients 79.00% 82.00% 85.00% 87.00% 90.00%
23% of internal clients with access to technology (internet, e-mail, computing equipment,etc)
70.00% 80.00% 90.00% 95.00% 100.00%
24 % of Market culture 19.20% 23.00% 25.00% 27.00% 30.00%
28 % of compliance with the Training Plan 80.00% 95.00% 95.00% 95.00% 95.00%
Integral Control Panel - FONDESURCO 2010 - 2013
14. Develop capacities,competencies and values 27 % of employees with performance evaluation
and feedback52.00% 90.00% 95.00% 100.00% 100.00%
26 % of turnover and employee absenteeism 20.40% 16.00% 12.00% 10.00% 7.00%
69.22% 75.00% 80.00% 85.00% 90.00%
5 5
Lea
rnin
g
12.Improve the informational systems and technological capacity
13. Improve the institutional culture and the level of employee satisfaction 25 % employee satisfaction
8. Position FONDESURCO as an MFI that gives credit for development
Pro
cese
ss
10. Develop products adapted to the needs of clients 20 Number of products and sub-products developed 1 5 5
7. Improve client satisfaction 15 % of satisfied clients 74.00% 76.00% 79.00% 81.00% 83.00%
Goal
Fin
anci
al
5. Improve financial performance indicators.
Cli
ents
6. Improve client loyalty
Social
1. Contribute to the social and economic well-being of rural micro-producers
2. Allow access to credit to people found in economically and /or socially disadvantaged positions
Objective Specific Measurement
SPM in balancing objectives :Integral Control Panel - FONDESURCO 2010 - 2013
1% of clients who have shown an improvement in their social well-being (+ DS)
2N° of clients who have shown an improvement in their economic well-being (+ DS)
3 N° of clients who have received training
4 % of rural clients
5 % of clients who are women
6 % of clients who access credit for the first time
7 % of clients who are poor
3. Grow the credit portfolio 8 Credit portfolio (S/.)
4. Access financing for the continued growth of the gross loan portfolio
9 Available financing (S/.)
10 Eficiency: Operational costs/Average Gross Loan Portfolio (%)
11 Profitability: Profits / Average Total Equity (%)
12 Sustainability: Total Revenue/ Total Expenses (%)
Fin
anci
al
5. Improve financial performance indicators.
Social
1. Contribute to the social and economic well-being of rural micro-producers
2. Allow access to credit to people found in economically and /or socially disadvantaged positions
Objective Specific Measurement
SPM in balancing objectives :Integral Control Panel - FONDESURCO 2010 - 2013
13 % Exclusivity
14 % of desertion
16 % who would recommend FONDESURCO
17 % Market Position (Top of mind)
18 % of Recollection of Brand (Awareness)
9. Develop development services for clients19 Number of complimentary services developed
11. Develop integrated management based on risk 21 Risk rating
22 % Satisfaction of internal clients
23% of internal clients with access to technology (internet, e-mail, computing equipment,etc)
24 % of Market culture
28 % of compliance with the Training Plan14. Develop capacities,competencies and values
27 % of employees with performance evaluation and feedback
26 % of turnover and employee absenteeism
Learn
ing
12.Improve the informational systems and technological capacity
13. Improve the institutional culture and the level of employee satisfaction 25 % employee satisfaction
8. Position FONDESURCO as an MFI that gives credit for development
Pro
cesess
10. Develop products adapted to the needs of clients 20 Number of products and sub-products developed
7. Improve client satisfaction 15 % of satisfied clients
Cli
en
ts
6. Improve client loyalty
Objective Specific Measurement
SPM in activities•Positions: Manager of Investigation Development and Innovation, Controller, HR, Directors of Marketing and Development …•Studies: segmentation, market position, satisfaction, desertion, …•Tools: PPI, BSC, SPI, Management by positions, Management by processes, … •Plans: Strategic, Business, Marketing, Human Resources, Training and internships, Internal Auditing, Risk, Development, …•Evaluations: internal auditing and risks; Social Qualifications, strategic control…
SPM in Control: SPI
Results:• Social: Exclusivity 69%; poor clients 25%; 43 of 52 districts
are considered poor; gender 43%; rural 94%, agricultural 80%; client satisfaction 74%; employee satisfaction 79%... Technical assistance…Aligned with the social mission• Financial: ROE 31%, ROA 10%, Profitability of portfolio
31%, Costs 14%, Portfolio at risk 1.91%, portfolio growth 50%... More access to financing in spite of serving a “riskier” and “more costly” sector and we are profitable and sustainable. • Evidence: Social Rating “4”, Performance Rating “B+”
(Planet Rating), Risk Rating “C” (Class Asociados); Social Auditing(SPI); Transparency and Gold Category (CGAP-Mixmarket)
