In this final post in our series on SEF, we are taking a look at how Truelift Assessment and the Pro-Poor Principles have guided SEF’s priorities moving forward. Speaking again with John de Wit and Esido Mushwana, we will learn how the Truelift Assessment helped SEF make changes in their operations that further encourage positive and enduring change in the lives of their clients.
John de Wit, Managing Director, found that that undergoing Truelift Assessment offered an opportunity to SEF leadership: “When you have an assessment like that, the staff knows. They realize that a rating team is like an audit team and that they are coming in from overseas and so forth. It’s quite a big thing.” In the months preceding the rating team’s arrival, de Wit was able to say his staff: ” ‘Guys, let’s push through a few of these things before they get here.’ It was an easy way to focus people on certain issues and was very helpful in that sense.” He leveraged this opportunity into a number of improvements at SEF, including additions to the group loan policy that help SEF clients with emergencies, improvement of client protection policies, and the creation of a Code of Ethics – all of which were examined during their Truelift Assessment.
Esido Mushwana, Research & Development Manager, found that SEF’s Code of Ethics has also helped focus and motivate SEF staff. “Many of our staff members didn’t completely understand our mission,” explains Mushwana. “Now [that we have created the Code of Ethics] everyone is really willing to sign on and commit to our social performance goals. It did change a lot in how we focus on social performance as an institution.”
Following SEF’s Truelift Assessment along the Pro-Poor Principles, they have identified and made progress towards several poverty-focused goals. One item that came to the fore through the assessment was the client grievance procedure, one of the tenets of the Client Protection Principles (CPP) set forth by the Smart Campaign. Mushwana explains:
“One of the things that happened during the Assessment was that we noticed there are clients who actually don’t know what they are supposed to do in case they don’t understand something. Some of them don’t even know how to get to their branch manager because they are living in some of the most remote areas.
So we developed something – we call it a Client Protection Card. The idea was to have each and every client have a card which has information, like, you are not allowed to give any staff member any money – any bribe. Our staff members are not allowed to handle any cash at any time. [The card also contains] numbers – for the head office, and for the regional credit regulator. We are able now to handle complaints with the operations and regional mangers so we can clarify and make them understand, which was a huge step.”
Some other initiatives that SEF plans to implement in the coming years include a Graduation Program, for those clients moving into more sophisticated entrepreneurial loans, additional products and/or services tailored to meet the needs of client emergencies, and improved evaluation of their financial and business trainings, provided in partnership with Freedom from Hunger. The training program, Mushwana explains, “is very time consuming, so we want to make sure that clients are receiving it in a good way. Some clients are responding very well, and some clients don’t show very much of an interest.” Mushwana believes that this difference in the way clients respond to the training could be for a variety of reasons, and effective evaluation is a challenge they would like to pursue in the near future. Mushwana also has aspirations for a kind of Financial Diary program, to better understand what clients use their money for.
Recommendations from a Milestone MFI
As SEF has over 20 years of experience working with people living in conditions of poverty in South Africa, we asked both John de Wit and Esido Mushwana for their thoughts to share with others working towards the practice of pro-poor microfinance. Here is what they had to say.
Some words from John de Wit:
“I always try to motivate MFIs that come to us to go slowly. Go really slowly in the beginning, I give this example: It took Grameen three years to get to one thousand clients, and it took us one year to get to one thousand clients. I always think that’s the biggest mistake we ever made. We went too fast. Eventually you have some cracks in the system and you don’t even realize it. Maybe you’re achieving your group numbers and arrears are low and so on and so forth. And so you’re all happy and excited and off you rush – not realizing that you might turn around after a number of years and say ‘gosh you know what, our clients aren’t even really in business!’ If you don’t have a system for checking to see if clients are really in business or not, for example, field staff doesn’t care whether they give loans for business or for other things, no matter what our policies say. They won’t think it is important if we never come to check it. So, I would absolutely say – go slowly, and set up as much auditing and checking as you possibly can!”
Esido Mushwana’s advice from experience:
“What I can say is whatever the MFI does, whatever we do, try and evaluate it and understand first: why are we doing this? What consequences could this have on the clients? What [consequences] could it have on the organization? What benefits can we draw from all this? Usually the mistakes we find are, for example, now we want to pay attention to growth. You can grow the number of clients, and even if your methods are not right you can see growth for two or three, maybe even four or five, years. But then when you start experiencing challenges because your foundation was not good, you will collapse to the ground. So one thing we’ve learned at SEF and for myself as well, is that when we implement something it’s very important to take the time to evaluate it and understand it before you decide you want to roll it out. Try to evaluate and stop at every step – ok is this working? Is it not? What are the challenges? How can we fix it? You need to have a policy and procedure in place and ways and means to evaluate whatever you are implementing consistently. Don’t be afraid to get into serious debates with Operations! I often get into fights with my Operations. Time and again we argue but, at the end of it all, it’s because we all want to make sure to do the right things to serve our clients with respect and make sure they are protected. We are not here for ourselves. We are here doing this job for our clients.”
Take a look at the other two posts in this series on SEF:
We hope SEF’s experiences outlined in this series are able to shed some light on what a poverty-focused MFI looks like in practice. Continue along on our journey as we take a closer look at our other Milestone MFIs in the coming months. Feel free to leave your comments here on the blog, or contact us at info[@]truelift.org.