Last Friday in Manila, Philippines, Truelift recognized the first “Milestone MFIs” to have undergone Truelift Assessment at the Microcredit Summit Campaign’s Partnerships against Poverty Summit. These MFIs stated their commitment to pro-poor microfinance practice, and have been recognized by Truelift for the milestones they have reached thus far along the path.
The Pro-Poor Principles framework defines four milestones along the pathway to pro-poor microfinance (see below), beginning with Aspirant practitioners, moving through Emerging, Achiever and Leader MFIs.(click to enlarge image)
The following seven MFIs have been recognized by Truelift as the first Milestone MFIs:
Key pro-poor facts: The only MFI in Senegal to offer credit and savings according to the village banking methodology (99%) suited to the needs of the poorest households. No minimum amount for credit and savings, and savings collected in the group can be given in internal credit to generate profits that can then be capitalized in the village bank or redistributed to members in the form of dividends. From its annual PPI survey on the same cohort of customers, the 2010 pilot survey revealed that as the number of cycles increases, % of clients falling below the NPL decreased (46.9% for 1-3 cycles, 44.8% for 4-6 cycles, and 42.9% for 7+ cycles). [Truelift recognition: “Emerging Practitioner”]
Key pro-poor facts: While Banco FIE does not specifically aim to reach poor populations, the incidence of poverty by unsatisfied basic needs in areas of operation is important, 48.2% and 48.0% (considering borrower and saver clients respectively), although lower than the national average of 58.6%. 63.4% of clients and 62.2% of the branches are located in municipalities whose poverty rate is below the national average. [Truelift recognition: “Emerging Practitioner”]
Negros Women for Tomorrow Foundation (NWTF)
Key pro-poor facts: NWTF shows the highest poverty rate of all the MFIs in the Grameen Foundation poverty calculation research (from 30% to 64%). A poverty movement report was provided to the Board of Directors, showing poverty change based on the PPI data. The Board established an SPM Committee to work more on positive change in clients’ lives and provide direction based on the poverty movement data received, including an increase in the activities of the Client Service Department for non-financial services. [Truelift recognition: “Achiever”]
MicroFund for Women (MFW)
Key pro-poor facts: MFW implemented systems to include poor households. In particular, with each new loan it collected its clients’ income levels and proxies such as access to education as part of its loan appraisal process. MFW was the only institution in the market that cancelled the up-front fee and voluntarily lowered interest rates while maintaining an above average ROA for Jordan at 7.4%. [Truelift recognition: “Achiever”]
Key pro-poor facts: According to the 2011 client satisfaction survey, 89% of clients rated the financial services received from FINCA Peru as very good or good. For non-financial services, 82% of customers rate the quality of training as 16+ (out of 20). In offices with the highest concentration of poverty, satisfaction was 80%. [Truelift recognition: “Achiever”]
Small Enterprise Foundation (SEF)
Key pro-poor facts: SEF is committed to enabling clients to make strides against poverty. SEF conducts considerable piloting and adaptation to test client needs; currently there are five credit options offered. 85% clients use monthly option (6,4 months’ term); otherwise fortnightly (expected for new clients, but new clients in existing groups end up paying monthly). [Truelift recognition: “Achiever”]
Key pro-poor facts: Cashpor’s annual survey data aims at tracking change over time and is collected by their internal audit team to analyze PPI score by loan cycle; after 6 cycles, of the ~25% of clients who have borrowed continuously, ~59% are above the $1.25 line; ~44% % are above the $1.50 line. [Truelift recognition: “Leader”]
Last week in Manila, three of the seven first Milestone MFIs were present for recognition at the closing ceremony of the Summit: Negros Women for Tomorrow Foundation (NWTF), Small Enterprise Foundation (SEF), and Cashpor. Hear from NWTF, SEF and Cashpor in this video of the closing ceremony (first video on page, Truelift ceremony beginning at 18:45).
For more information, visit our pages on Truelift Assessment and the poverty-focused Community of Practice.
Great to see this promising new initiative that brings together and reinforces other industry standards like Smart and USSPM has reached this point — congrats to the Truelift team !
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Am impressed by the performance of the MFI’s. Would try and replicate one of them after my graduation or in the not too distant future. Am proud of the Truelift group/team.