Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
SPTFAnnualMeetingPlenaryNotes,Day2
MexicoCity–June8,2017MakeorBreak:AConversationbetweenregulatorsandtheregulatedModerator:ClaudiaRevillaOstos,ProDesarollo(Mexico)Speakers:• RudyAraujoMedinacelli,ASBA(Mexico)• JorgeTorres,Condusef(Mexico)• JimMadrizLópez,ComisionNacionaldeMicrofinanzas(Nicaragua)• JoseAuadLema,CRECER(Bolivia)
• Claudiasaidlobbyingissomethingyouworkoninthenetworks.It’simportantto
makethemostofthepanelandlearnfromeachother.Regulationshouldnotbeanobstacletothedevelopmentofmicrofinance.
• Jimsaidasregulators,weareopentolearningfromthepracticesofothercollaborators.CONAMIworkstopromotemicrofinanceandisanautonomousentityinthegovernmentofNicaragua.Therolestemsfromthe2008non-paymentmovement.It’sinterestingthatweworktopromoteandregulate.o Weworkwithtwotypesoflegalentities.Today,wehave36regulated
institutions.o Forsome,itismandatorythattheyberegulated.Forothers,itisvoluntary.o Toberegulated,therearetwoconditions:(1)Socialcapitalhastobe
$200,000and(2)Microcredithastobeatleasthalfofitsoperations.Ifyoucomplywithboth,youcanbearegulatedinstitution.Thelawalsorequiresthemtocomplywithconsumerprotection,transparencyandmoneylaunderingprevention.
o ClientscancometoCONAMIiftheyfeeltheydonothaveadequaterecourseviaclientcomplaintmechanisms.
o WhenwestartedworkingwithregulationwehadtothinklikeanMFI.IntheOutcomesWorkingGroupmeetingtheotherday,someonesaid:“Tounderstandsomething,youhavetobeintheotherperson’sshoes.Andnotjustbeintheotherperson’sshoes,butwalkintheotherperson’sshoes.”
o ClientsarethemostimportantelementinanMFI.• Josesaidthatafewyearsago,CRECERanditsinvestorswereconcernedabout
whethertheinstitutionwascomplyingwithmission.Weworkedwithseveralinternationalinitiatives–CERISE,SPTF,SmartCampaign,andPPI–andhavenowbeenintegratingthesetools.o RegulationgaveaqualitativeleapinBolivia.Itemphasizedtheimportanceof
protectingclients.It’sabroaderconceptthanjustsayingregulationwouldprotectthesavingsofthepublic.
o ThesixdimensionsoftheUSSPMareintegratedintodifferentpartsoftheregulation.Corporategovernanceisnowincludedinregulation;beforeitwasnotmandatory.
o Submittingastrategicplanthatincludessocialgoalsisnowmandatory.Before,itwasjustfinancialissues.
o Thelawappliestoeveryone,notjustthosewhoworkformicrofinance.• RudysaidASBAbeenanorganizationfor17years.Itgatherssupervisorsofall
countriesintheAmericas,exceptforCanada.ASBAisnotasupervisoryentity.Ittrains,providesaplatformfordialogue,andfacilitatescooperationamongthemembers.o Conceptofsocialprotectionisaquestionallcorporationshave.They
sometimesprojectasocialprotectionimagewithoutactuallytrulyadvancingasocialmission.
o Twoissueswithsector:§ Thereneedstobegreatertransparency.§ Thereneedstobebettermarketbehavior.Thisrelatestothework
Condusefdoesintermsoffinancialeducation.Themorefinancialeducationclientshave,themoretheyareabletochooseamongproducts.
o Thiscomesfromthetop-down.Inthenewworldweareapproachingwithnewtechnologies,theclienthastobeatthecenter.Theindustryisnotunderstandingthattheclientisthemainasset.Thosethatdonottakecareoftheclientwillnotbeinthemarketlater.
o Theindustryneedstothinkfromthebeginninghowclient-centereditssystemsandregulatoryframeworksare.Financialeducationandclientprotectionareessential.
• Jorgesaidregulationisanopportunitytogrowthemicrofinancesector.o Condusefisadvancedinclientprotection.Wepromotetransparency
measurestoprovideasmuchinformationtotheclientsaspossibletohelpthemmakethebestchoiceforthemselves.ForCondsef,themostimportantthingistodefendtherightofclients.
o Condusefalsoprovidesfinancialeducationtohelpempowerclients.o Mexicorecentlyhadreformindifferentareas,includingfinancialreform.This
givesCondusefmorewaystoregulateandstandardizethefinancialservices.o Reformscreatedacollectionregistry.Thereweremanyclientcomplaintsfor
mistreatmentfrominstitutions.Wearetryingtopromoteuseofcredit,butnotatthecostofhumandignity.
o CondusefcanrequireMFIstoeliminateabusivepractices.Savingsunionshavethemostabuses.Manytimesithasbeenduetolackofknowledgeandnotbecauseofillwill.
o Reformsalsocreatedafinancialinstitutionbureau.Itrequiresawebsitewithinformationonthebehaviorofdifferentfinancialinstitutions:complaintstheinstitutionsreceive,iftheinstitutionshaveabusiveclauses,howlongittakestoresolvecomplaints,andwhatpercentageofcomplaintsareresolvedinthe
favorofclients.Italsoincludesinformationonwhichinstitutionsprovidefinancialeducation.
o Condusefwantstobecomeanarbitratorbetweenthefinancialinstitutionandtheclient.
o Thereformshavebeenhelpfulinimprovingclientprotection.Thesectorhasmanymoreopportunitiesthanchallengesinregulation.
• QuestiontoJim:Shouldregulationbeconductedbottomuportopdown?o Jimsaidbottomup.In2008,Nicaraguahadanon-paymentmovement,the
governmentwasveryconcernedaboutpromotingthemicrofinancesystem.Theydecidedtoregulateinstitutionsbutalsotopromotethem.Withthenon-paymentmovement,manyMFIsmovedawayfromruralarea;nowwiththeSPMmovement,theMFIsaremovingbacktowardreachingthispopulation
o EntireregulationwasstructuredaroundtheUSSPM.o Westillhaveinstitutionsoutsideregulation.Nomatterhowmuchweexplain
tothemaboutregulation,theydonotwanttocomeinvoluntarily.Wearenowreformingmicrofinanceregulationtoremovethevoluntaryaspectsotheycanallcomein.
o Therearesanctionsiftheydonotfollowclientprotection,anditispublishedontheCONAMIwebsite.
• QuestiontoJose:Shouldregulationbebottomuportopdown?o Josesaidtheregulatorhasafundamentalroleinlisteningtoinstitutionsin
creatingtheregulation.Butalso,itshouldhelpinstitutionsleavetheircomfortzones.Forexample,interestrates.Now,50%oftheportfoliomustberegulated.Theprofitabilityofthebanksfell,butmostfinancialinstitutionshaveanROEaround15-18%.
o Now,wehavemorecreditgearedattheproductivesector.Westillhavestrongfinancialinstitutions.Institutionshavebeendriventomaketechnologicalchangestobecomemoreefficient,reviewcoststructures.It’stakenusoutofthecomfortzone.Institutionsarenowfindinganewbalancepoint.Therearenocasualties,butsomearewounded.ThestrongestwillsurviveintheBolivianmarket.
o Institutionsthathaveregulatedrateshavegoneupandpartedfromsmallercredit.Therehavebeenothertypesofinstitutionswhereinthesameperiodoftimehaveincreasedclientbase.It’sbecausewearesmallerfinancialinstitutions,sotheyhaven’tputusinthesamebucket.Theysaidhere’syourlicense,youhavefiveyearstoadjustyourproductivecredit.Thisiswhat’smakingitpossibleforinstitutionslikeourstorefocusonprovidingservicesatthebaseofthepyramid.Justastherearepositiveeffectswhenwearetakenoutfromourcomfortzone,therearealsorisksthestatehastoconsider.
• Rudysaidtherearesomefundamentalelementsofregulation:o Thefirstelementisthecapacitytoregulateandtomonitor.Regulatorsneed
tounderstandtherisksineachsegment,andaltertheirregulationaccordingtosuchrisks.Thisiswheremanyfailbecausetheydonotknowthemarketstructure.Technicalindependenceandsupervisorfreedomisalsoimportant.
o Youneedtounderstandthemarket.Wetalkaboutproportionalityandregulatoryexpectation:youdon’tcomplywithwhatIthinkyoushouldhave.Wehaveaseriesofthesetypesofconcepts,whicharehardtotrulyadapttoregulation.
o Supervisorsshouldbeconcernedaboutaddressingsystemicrisk.Withouttheseissues,wecouldhaveblackmarketsorunregulatedbanking,whichhurtsclients.WedresswellandgotoCancunandsay,“We’reprotectingtheclient.”Noyou’renot.
o Youhavetoallowforreasonablereturn.Youcannotdrownittoomuch.Distortionscanstemfrompoliticsoralackofknowledge.Somethingiswrong.Somewhereinthechaintheyareeatingupallofthebenefits.Inthesecases,weneedtoexpectthatafinancialinstitutionshouldbeefficient,havereasonablereturnsandhaveclearunderstandingoftheclientitisserving.
o I’mnotagainstinternationalstandards.ButwhatIdonotsupportistheinclusionofinternationalstandardsthathavenothingtodowithyourmarket’sstructure.
• Question:HowisCondusefworkingtoincreaseproportionality?Forexample,afinemaybedisproportionaltoamicrofinanceinstitution,comparedwithabigbank.o JorgesaidthattheroleofCondusefisfundamentalintheMexicosystem.We
defendtheclients.Additionally,Condusefhelpsbalancethefinancialsector.Aswepromotefinancialeducationandpersuadepeopleaboutthebenefitofusingcreditresponsibly,userswillbenefitbutalsofinancialinstitutions.Themicrofinancesectorcanbenefitsignificantlyfromregulation.
o Intheend,withthismanychallenges,itcontinuestorepresentagreaterbenefitforfinancialinstitutionsthemselves.
o WehaveasignificantchallengeregulatingMFIsbecauseyouwillneverfindthewordmicrofinanceinregulation.Intermsofregulatorychallenge,thisiskey.Wearealwaystryingtogivethesectorpreferentialtreatment.Wehavemanychallenges.Aswehavegreaterfinancialeducation,peoplewillbeabletousefinancialproductsbetter.Financialinstitutionsarenotrespondingtothis,perhapsbecauseofregulation.
• Rudysaidthathethinksitisdangeroustohavealawforeachsector.Itisbesttohaveageneralregulatoryframeworkandseehowtoapplyittodifferentsectors.
• JimaddedthattherearetwosupervisoryentitiesinNicaragua:onesupervisingbankandanotherentitythatcreatesreforms.SheagreedwithRudy:Wehaveregulationthatisnotaperfectmatchtoeachinstitution.It’ssomethingthatinstitutionsacceptwhentheyadopttheregulation.Wethoughtwithinfiveyears,institutionswouldadoptabout60%oftheregulationsissued.Wenowhave75%acceptance.Thatmeansinstitutionstrusttheregulators.
• Question:Forhardtoreachregions,shouldweexpandthesameregulatoryframework,orshouldwethinkofdifferentregulatorysolutions?o JimsaidNicaragua’slawsaysregulatedinstitutionscanbecertifiedinSPM
andaccessapromotionfund.Youneedtoshowyouaregivinganopportunity
tolow-incomesectorsaswellaspromoteclientprotection.Thefundhelpsthemreachruralsectors.
o Josesaidprovidingfinancialeducationisnottheresponsibilityofthestate.Itistheresponsibilityofthestatetodemandtheprivatesectorprovidesit.Thisisontheshouldersofprivateentities.CRECERisforcedtoopenonebankperyearwherethereisnobank.Thisisbringingusoutofthecomfortzone.Intelligentsubsidiesneedtobegivenbytheprivateentities.
o Rudysaidoneofthegreatestproblemswehaveisthehyperurbanizationofourservices.Wehavefocusedonurbanareas.Howdowereachthefield?
o JorgesaidMexicohasachallengeaheadintermsofdifferentiatingregulations.Theprofitsarenotthesameinmicrofinanceatall.Someinstitutionsarebarelysurviving.Theyarenotanenterprise.Weneedtopromotehealthydevelopmentbecausetheyarefightinginunhealthyconditions.
o RudysaidhethinkstheratesaretoohighinMexico.ForeignbanksdonothavetojustifytheirbottomlinewiththepovertyratesinMexico.Butweneedtotalkmoreopenly.Ratesaretoohigh.Thereisalottodo.
• ClaudiaclosedthepanelbynotingtheimportanceofSPMinregulation.Regulatorsneedtounderstandregulation.Thereismuchworktodogoingforward.
ResponsiblePricing:AreWeGettingClose?Moderator:AndreaDomínguez,Oikocredit(Uruguay/Holland)Speakers:• BlancaAldasoro,FundaciónAlemanaServicios(Mexico)• MaríaSilviaAbalo,RADIM(Argentina)• AnnaKanze,GrassrootsCapital(USA)• ClaudiaRojas,TripleJump(Mexico)
• Blancasaidherorganizationisabouttopublishastudytobetterunderstandthe
pricingstructureandstarttodecreaseinterestratesatfasterspeed.o Thestudyexamineseachcomponentintheinterestratetobetterunderstand
theirtrends.o Thestudywillmakeproposalswiththeaimofbetterhelpingtheenduser.o Whenwelowertherate,weneedtocontinuereachingthepoorestandmake
surethetransactioncostsarenotincreased.o Studyco-fundedbyIFC,TripleJump,PRONAFIM
• ClaudiasaidTripleJump(TJ)hasseveralfundsfocusedonsocial:women,ruralareas,greenproducts.Otherfundsareformorematureinstitutionstohelpthembeabletogeneratemoreemployment.o Generallyspeaking,thesocialissueiskeyforTJ.Wegivefinancialandsocial
equalrelevance.Weaskmoreandmorequestionsaboutsocialastimegoes
by.Welookatwages.Wehaveatoolthatlooksatinterestrates.Partoftheduediligenceistoaskthemeverythingaboutsocial,aswellasinterestrate.
o WeusetheAPR.InMexico,italsoincludesmandatorysavings,feesandtaxes.Wecalculateallofthis.Wecomparetheinterestrateofpeersandlookatprofitability.Ifaredflagistriggered,wethenlookatotheraspects.
o Thisisnottosaythathighinterestrateswouldinstantlymakeuspullout.Butifitishigh,thenwelookatwhat’sgoingon:Isthemarketdifficult?Highinflation?Highoperatingcostsandwages?Alotofruralareas,makingitexpensivetodooutreach?Wealsolookatprofitsandtrytounderstandiftheyhaveworkedhardtolowertheinterestrateintime.Ifnot,whyisn’ttheprofitbeingpassedon?Perhapsithascapitalizationlevelstheyhavetocomplywith,maybethere’spoliticaluncertainty.Therearemanydifferentvariables.Weaskalotofquestions.
o Thistoolhasbeeninplaceforsevenyears.Weapplyitinallcountriesandinallourassessments.Weareasocialinvestor.Theendclientisthemostimportantthing.
• AnnasaidGrassrootsmanagessocialcapital.o Itprovidestrainingstosharegoodpractices.o Itmakeslonger-terminvestments.Weareactiveshareholders,andweare
alsoontheboardofdirectors.Weconsidermanyfactors,buttheinterestrateisapointwherewecanstartmanyconversations.Ourinvestmentshaveasocialandfinancialaspect.Weneedtobalancethat.It’snotthattheinstitutionhastochargeacertainrateorhaveacertainperformance.
• MariacomesfromRADIM,anArgentiniannetworkofmicrofinanceinstitutions.From2002-2016,therewasacrisisinArgentinaandmanypeoplefellbelowthepovertyline.Thereweresocialinvestorsthathelpedtostartthemicrofinancesector.Wehaveverysmallinstitutionsuptobanks,whichhaveverydifferentinterests.Creditsrangefrom$200to$3,000.Wehaveratesthatareveryhigh.
• QuestiontoBlanca:ExplainthedeterminingfactorsforinterestratesinMexico.Whathavebeenthemainobstaclesinreducingtheinterestrates?o Blancasaidwhenwedisaggregateinterestratefactors(funding,operation,
profitandprovisions),operationalcostsarethehighestandhumanresourcesisthehighestpartofthat.70%ofoperationalcostsarestaffcosts.Threethingsarehappeningwithstaffcosts:
§ Weneedtobeabletoanalyzestaffcostmorein-depth§ ProductivityofstaffinMexico.AveragestaffproductivityinLatin
Americais130clientsto1staffmember,whileinMexicoitis96clientsto1staffmember.Weareunderneaththeaverageoftheregion.
§ StaffturnoverinLatinAmericais22%.InMexico,itismorethan50%.In2008,itwas30%andithasbeenincreasingrapidlyinrecentyears.Thiscreatescostsfortrainingnewstaff,aswellashigherriskinthecreditportfolio.
o InMexico,wehavelowaveragecredit($432)comparedtotherestoftheregion.Thisistheresultofgroupmethodology,whichmakesup86%of
Mexicomicrofinance.Mexicohasbeencharacterizedbyhavingcoverageinhighlymarginalizedareas.Thisisnoblework.Now,wehavetohavebetterconditionsforthem.It’sthepoorestpeoplethatarepayingthehighestrates.
§ Weneedoperationalscalabilitytohelplowerinterestrates.§ Weneedtoincreaseclientbasewithoutharmingthecurrentclient
base.§ Weneedstrategiesforindividualcredit.Grouploansareverygoodbut
theyputacaponthecreditvaluethatcanbegranted.§ Also,competitionisimportant.Mexicohasahighlevelofconcentration
(implyingalowlevelofcompetition).Whencompetitionincreases,theinterestratelower.Marketincentiveswork.
§ Weneedtomakeinstitutionsmoreefficientandworktostrengthentheirmethodologies.Thereneedtobeincentivesandcompetition,andthentherewillbemotivationfordecreasinginterestrates.
• QuestiontoBlanca:Hasthisstudyexaminedthedifferencesinsalaryscalesbetweenemployeesandexecutives?Whywouldtherebesuchhighturnoverifsalariesaresohigh?o Blancasaidshecompletelyagrees.Wehavedisaggregatedinformationto
checkthesalarystructure,butthereisneedtocheckthedifferentlevelsofsalaries.
o Regardingturnover,somesaidloanofficersarepoorlypaid.Otherssaytheyarewellpaid,butthechallengesbeinginthefieldwithgroupmethodologyleadtohighturnover.
• QuestiontoClaudia:WhathasTripleJumpdonetolowerinterestrates?o ClaudiasaidTJhasbeeninMexicoformorethan10years.Wehavehad
influenceinvariousways:§ Wehavemadecapitalinvestmentsinthecountry.Wewantedto
influenceMFIsfirsthandtodiversifytheproducts,andwediditthroughcapital.
§ Wealsoinfluencethroughdebt.Wehad10institutionsinthepast,butnowonlyhave2.Ithasbeendifficulttojustifyhighinterestratestoourinvestors.
§ Wehavedevelopedatoolthatlooksatdifferentaspects,includinginterestrates.WeusetheStoplighttoolwedeveloped.
§ TJalsohasaspecificguideinMexico.Wehavealimitof100%.Anythingabove100%isautomaticallyano-go.Then,wealsolookatgovernanceissues.
§ InMexico,it’sverycommontohaveinstitutionswhosefoundersareontheboardandarealsofinancialmanagers.Wewanttoknowifthereareexternalmembersontheboard,iftheyhaveauditedfinancialstatements,etc.
§ Wealsolookatgeographicproductconcentration,andwecelebrateinstitutionsthatwanttogointonewareas.
§ Welookathowinstitutionsaredoingcreditassessmenttopreventover-indebtedness.Wehavethesestandards,andwehavehadtodropinvestmentsbecauseofit.
§ TJusespartofitsrevenuetoprovidetechnicalassistancethroughconsultants.Wehavesupportedinstitutionstostrengthenthemselveswithmarketstudies,developindividualproducts.
§ Mexicoismorecomplexthanothercountries.Governanceandinterestratesaredifficulthere.Therewasonethattriedtoremovemandatorysavings,thinkingthatwouldresultinmoreclientsandabetterimpactbyreducingtheAPR.Intheend,theirriskportfolioincreased.
§ Itisveryexpensivetoworkwithindividualcredit,andthereisnomotivationtodoit.
§ OtherinternationalfundersarenotasstringentasTJ,andinstitutionswillgotheretogetfunding.
o QuestiontoClaudia:Howdoyouconvinceexecutivestoworkoncorporategovernance?
§ Claudiasaidweareobviouslynotgoingtobeabletochangetheshareholderstructure.Butmoreandmoreinstitutionsaretryingtoaudittheirfinancialstatements.Thosewhowanttomoveforwardandshowtheyarewillingtohavebettercorporategovernance,theyarewillingtoworkonthesethings.
o QuestiontoMaria:WhyhasArgentinanotbeenabletoreduceinterestrates?§ Mariasaidthemainissueisfundingcosts.Wearetalkingaboutrates
similartoMexicowithhigherinflation(almost40%in2016).Argentinabecameisolatedfrominternationalmarketsbecauseitwasnotabletopayitsdebts.
§ Wewerealsoisolatedfromlocalfunding.Argentinacouldnotdealwithinflation,whichaffectedsavings.Becausetherewerenosavings,localcreditwasscared.Becauseofthat,ArgentinianbankswerenotlendingtoMFIssoMFIswereleftwiththeirownequity;howevertheyhadverylittleseedcapital.Theissuehasbeenhowtosurvivewithalackoffunding.
§ MFIsstayedwiththeirexistingclientsbecauseitwaslessriskythangoingtoothers.Now,MFIsarestartingtoexpandtonewclients.
§ Currently,withaportfolioofUSD$100million,wereach100,000people.Analternativetofinancingformicroentrepreneurswasthefinancingby“sharks”offeringratesof1,500%.
§ Severalfactorsinfluencethehighvalueofrates:30%comesfromthefundingofpublicbanks(pricepaidbytheMFI);40%fromwagecosts.
§ Inflationwasalmost40%in2016andnowestimatedat25%.§ InternationalfundersarecomingbacktoArgentina.Theproblemis
thereare2-3institutionsthatareincontrolofthemarket.Now,wearereachinganagreementwithBelgianfundersthatiftheyfundlarger
ones,theyhavetofund1-2smallerones.Tolowercompetition,theremustbegreateraccesstocapital.
§ LaborcostsinArgentinaareveryexpensive.It’s40outofthe100pointsthatmakeupaninterestrate.It’sahighlyunionizedcountry.
§ InArgentina,theMFIswhoaremakingmoneyaremakingverylittle.Publicinstitutionshavesomebenefits,butprivateinstitutionsdonot.They’renotmakingmoney.Nobodyiscomingtoofferanythingnew,whichwouldlowerinterestrates.MFIsneedtobecarefultosurvive.
o QuestiontoAnna:Howdooperations’debtandcapitalaffecttheinterestrate?Thefundingcomponentisanimportantpartoftheinterestrate.
§ Annasaidresponsiblepricingissubjective,butwehavetoreachthepoorandprovidethemresponsiblefinance.Wedonotwanttomakethemgointomoredebt.
§ Itisdifficultwithoutexploringallaspects,suchasdebt,profitability,investors,shareholders,aswellastheservicestheinstitutionisproviding.
§ Groupmethodologyisexpensive,butthereareothercountriesthathavegroupmethodologieswithouthavingsuchhighinterestrates.
§ Weneedtolookatwhatclientsvalue.IstheinterestratehighbecausetheMFIoffersnon-financialservices?Ifso,doestheclientvaluethat?Ifnot,itmightnotbeworththeinterestrate.
• ClaudiasaidTripleJumpbelievesthemostimportantthingtounderstandisifaninstitutionistrulybenefittingtheclient.Wedonotwantinterestratecapsbecausethenyoumayexcludesomeclientsfromthemarket.
• Question:Haveyouanalyzedtherelationshipbetweenpricesandtheimprovementofqualityoflifeofthecustomers?o MariasaidthatalthoughArgentinadoesdonothaveaformalstudy,50%of
thepopulationdoesnothaveaccesstocredit.Itisdifficulttogrowwithoutaccesstocredit.Insuchpoorcommunitieswheretherearenoopportunities,whensuddenlytheyaregiventheopportunitytohaveaccesstoamachineforexample,thatisdevelopment.Withoutfunding,thereisnoimprovement.Therehasbeennomeasurementofimpact,butitwouldbegoodtoadvanceinmoreformalmeasures.
• QuestiontoBlancaandMaria:Whathasbeentheroleofgovernmentinpricing?o Blanca:InMexico,thegovernmenthasbeenapromoteroffinancial
inclusion.Thegovernmentwantstoextendfinancialservices,andtheregulationhasbeentryingtoprotecttheenduser.Additionally,ithasbeendevelopingprogramsfortechnicalassistance.Therehasn’tbeenagovernmentinterventiononpricing.
o Maria:Withasmallerentity,regulationbringsacost.Manydonotwanttohavesavingsbecausethereisacostassociatedwiththat.Publicbankinghasratesabout60-70%.Thisissetsothattheyarenotseennegativelybypublic.However,weputaninterestratelevelthatwentbelowinflationwhichisnotsustainablefortheinstitutions.Thegovernmentrecognizesthis
andisconductingaratestudy.Theimportantthingisfororganizationstobesustainable,toseektoreduceinterestrates,andtomaintainastrongfocusonthebalancebetweenfinancialandsocialperformance.
• Questiontogroup:Whathasbeenthemainprogressinrecentyears,andwhatarethechallengesgoingforward?o Blanca:In2000,theratewas120%.Nowit’s75%.Therehasalsobeen
progresswithprofessionalizationofMFIs.Thechallengeaheadistoreduceoperationalcostsandincreasescalabilitytoincreaseclientbase.Wealsoneedtoimplementproductsthatarebetteradaptedtotheneedsofclients.
o Claudia:Thebigchallengeaheadisthatregulationwillbeestablishedfromthebottomup.Thereneedstobefinancialeducation.Endusersdon’treallyhavethetoolstomakethosedecisions.
o Anna:It’simportanttocontinueanalyzingpricingdataandusethattoadjustproductsandservices.
o Maria:Weareonagoodpath.Giventhemacroeconomicsituation,therehasbeenadecreaseininflationrates.TheprobleminArgentinaisthevolume.
MeasuringandusingclientoutcomesdataModerator:AmeliaGreenberg,SPTF(USA)Speakers:• MónicaVelasco,IDEPRO(Bolivia)• VerónicaRoblesMoreno,FondoEsperanza(Chile)
• Ameliastartedwithdefinitionsaboutoutcomes:o Inputs,activitiesandoutputsaremeasuresofimplementation.They
referencewhatanFSPisdoing.Examples:§ Inputs:software,hardware§ Activities:processes§ Outputs:productsandservices(howmanyclientsdidyoutrain,etc.?
o Outcomesrefertochangesattheclientlevel.ChangeforclientsthatisplausiblyassociatedwiththeservicesoftheFSP.Doesnottalkabouthowmuchchangewascaused,butitlooksatchangethatisreasonabletoassumewasinfluencedbytheFSP.
o Impactistheamountofchangethatcanbedirectlyattributedtoanattributedtoanintervention.Impactwouldtellyouwhatpercentageofthechangewasattributedtoanintervention.
• Ameliasaiditiscomplextomeasureimpact.It’scomplicatedandsometimesimpossibletocollectdataonallthevariablesthatmakeupimpact.However,outcomescanbestudied,andeveryFSPshouldbecollectingoutcomesdata.
• ResourcesfromSPTF’sOutcomesWorkingGroup:https://sptf.info/working-groups/outcomes
o Webinars(recordings,PPTsavailableonline)tofacilitatepeerlearningonmanagingoutcomes.
o Harmonizedlistofindicatorsforbusiness,poverty,healthandinsurance.Thegroupisalsoworkingonotherareas.
o HavebegunpilottestingtheindicatorsinPeruandIndiao Publications:
§ MakingtheCasetoFSPsforOutcomesManagement§ GuidelinesforFSPsonOutcomesManagement.It’sabouthavinga
theoryofchange,collectingthedata,verifythequalityofdata.Whatisittellingyouandhowdoesthatchangehowyouoperate?
§ Guidelinesforinvestorsonoutcomesmanagement§ KOMIDA(Indonesia)CaseStudy
• QuestiontoVerónica:Whenandwhydidyourinstitutionstarttomeasureoutcomes?o Verónica:Weneedtoknowifwe’remeetingourmission.Weneedtobea
results-basedinstitutionsowecanhaveanimpactonpublicpolicy.Howcanwehaveanimpactwithoutdata?
o Itwasalongroadtogetstarted.Westartedin2006withastudy.Twoyearslater,wecarriedoutanotherstudythatwasnotisolated.In2012,weworkedonourownSPMsysteminanautonomousway.Forthefirsttime,wecarriedoutmeasurement.Inaddition,aspartoftheBBVAgroup,wearepartofanannualmeasurement.Thelongtimelinewasnotbecauseitwasdifficult.It’sbecausewehadtoconvincepeoplewhyweshoulddothis.
• Ameliahighlightedthatyoucannotknowifyouareaccountabletostakeholderswithoutmeasuringit.
• FondoEsperanzahaschosenfourareastofocuson:businessdevelopment,familywell-being,empowermentandsocialcapitalo Verónicasaidtheychosetheseareasforvariousreasons.Weknowthatthe
familyrelationshipiscrucialtoemployment.Weneedtoknowwhat’sgoingonthat.Weworkwith80%women,andweknowthatempowermentisfundamentaltocomeoutofpoverty.Finally,weknowsocialcapitalisasimportantasfinancialcapital.§ IndicatorsforBusinessdevelopment:businessskills,businessgrowth,
businesssurplus§ Indicatorsforfamilywell-being:per-capitaincome,socialsecurity§ Indicatorsforempowerment.Thesearequestionsdealingwithself-
perceptionwhereweaskabouttheirself-esteem,control,decision-makingpower,andleadership.
§ Indicatorsforsocialcapital:HowmuchdoItrustmyneighbors?Whataretheinstitutionalnetworks?
o Wehaveascorecard.Onethingistomeasuresocialoutcomestodisseminateinformationtoinstitutions.Onamonthlybasis,wecollectthisinformationandgenerateareport.Wealsodoacomparisonofwhenthey
cameintotheinstitutionandthenayearandahalflater.Wemeasureatthefirstandthefifthloancycle.Reportsgotoofficesandbranchesofeachteam.Theyalsogotoboardofdirectors.
o Wealsohaveaqualityareathataccompaniestheprocessoffillingoutthecardthatprovidesfeedbacktoofficerstoseehowthey’redoing.Wealsohaveareviewafterthefactsoweknowifinformationisbeingproperlycollected.AsaMFI,wereviewdataonaquarterlybasiswithBoardofDirectorsandcomparehowwe’reworkingcomparedtootherinstitutions.
• QuestiontoMónica:Whatdidyoulearnfromyourevaluation,andhowdidyoudevelopyourproductinresponsetothat?o Mónica:In2003and2004,wehadanevaluation,andwedidsomeinternal
reflectionontheresults.Itgaveusmicrocreditandbusinessdevelopmentdatathatwerenotinagreementwithourexpectations.Therewasimpact,butitwasnotsustainable.Therewerenosustainablechangesinbusinesses.
o Wedesignedaproductwestillhavetodaythatwassuccessfulinbringingchangetoclients’businesses.Weprovidetechnicalassistancetoproductivesectors.Thereareproductivesectorsthataresignificanttotheeconomicsuccessoftheregion;that’showweselectedthesectorsfortheproduct.Thishasgivenusroomforsomereflection.
o Thishasbeenabigeffort:thedesignofcommerciallinkageservicesforproductivechange.
o Tosupportthisdecisionandthisstronginvestment,wedecidedtoincludearesultsevaluationsystemthatwestartmeasuringtheinitialmomentaclientappliesforcredit.Allofthosethatgiveoutloansdothistypeofassessment.Thisfinancialassessmentforusisthebaseline.Wemeasureagainafterthefirstyear,orwhenthefirstcredithasbeenpaid,tocompare.Thisinformationisanalyzedbytechnicalstaffatheadquarters.
o Theindicatorsweuse:income,profits,equity,andemployment.o Theseindicatorscomedirectlyfromthefinancialassessmentand
repaymentcapacityoftheclient.o Manyofushaveawealthofdatabutwearenotmakinguseofit.o Informationcomesineveryday,butweanalyzeiteverysixmonths.
• Mónica:Outcomesmanagementisaninvestment.Itallowsustoevaluatehowweareperformingagainstourmission.Thisshifthasvalidatedthemission.Ithasalsosparkedareviewoftheproductsweareproviding.o It’saninvestmenttotheextentthatitallowsustoanalyzewhichsegments
itmakessensetokeepprovidingservices.Wehavestrengthenedourparticipationinothersectors.
o Fromanoperationalpointofview,itisalsoaninvestment. o Ithasbeenastrugglewithintheinstitutiontomaketheinvestment.o Itgivesyouanideaofwheretomakesignificantchanges.Itcanbeproven
thatthroughoutcomesevaluation,wearedecreasingthedelinquencyrates.
• Verónicaaddedthatwegivealettertoclientswiththeiroutcomes.Theyareabletoseetheresults.o Dependingontheresults,positiveornegative,werecommendtheymake
certaincommitments.o Wehaverealizedtherearecertainvariablesthathaven’tchangedasmuch
aswewantedthemto.Weneedtoimproveoureducation.o Wealsobringthisdatatohelpinformpublicpolicydiscussions.
• Mónica:Themostspecificexampleofoutcomesmanagementisaboutthecommercialstrategyandwhicheconomicsectorsweshouldfocuson.Throughouroutcomesevaluation,werealizedwewerenothavingthedesiredoutcomes.Ifwewerenotgettingresults,thecreditriskwassohighthatitwasn’tworthwhile.Westoppedprovidingservicestotwosectorsafterevaluation.Wealsoconductedanalysisofthelifecycleofourproducts,andwerealizedtherewereTAservicesthathadamorepositiveimpactthanothers.