Authors: Célia Fernandez & Joana Afonso.
The e-MFP Investors AG and Cerise+SPTF, through SPTF’s Outcomes Working Group and Cerise’s LabODD (SDG Lab), have been working on outcomes management and measurement since 2015. Successive projects have raised awareness among different stakeholders and developed tools to support the necessary and complex task of measuring client outcomes, analysing the findings and converting these findings into action - managerial decisions to improve existing programs and design new products and services that effectively respond to different clients’ needs.
As the Sustainable Development Goals (SDGs) became more commonly accepted and used in the development field, Cerise+SPTF and the e-MFP Investors Action Group started a project in 2019 to explore innovative approaches for investors and Financial Service Providers (FSPs) on measuring and reporting outcomes using the framework of the SDGs.
As a major output of this work, in March 2022 the report "Outcomes Management for Financial Service Providers: A proposed standard framework aligned with the Sustainable Development Goals" has provided a framework of actionable indicators based on the SDG targets that can answer the need for a simple, credible methodology to monitor outcomes: one that is built on a well-defined social strategy and theory of change, and that is assessed regularly through internal data management systems.
The SDGs are ambitious, and the framework can feel overly theoretical (or overwhelming) at the micro level for impact-driven organisations, with the 17 Goals broken down into 169 targets and more than 280 macro-economic indicators. Thus, extensive work was conducted with different social investors and FSPs to identify and test the most relevant targets and indicators. From these exchanges, three SDGs were selected as the most relevant for the financial inclusion actors - SDG 8 (Decent Work and Economic Growth), SDG 1 (No Poverty) – focusing on outreach to the vulnerable - and SDG 5 (Gender Equality).
This selection does not imply an exclusive use of these indicators. An FSP can decide to add other indicators, or to collect different indicators, since data collection must be driven, above all, by data that can inform business decisions. Nonetheless, it is possible to define a core set of indicators that can likely be applicable to most FSPs and facilitate benchmarking with similarly purpose-driven institutions.
Between September and November 2022, the e-MFP Investors AG and Cerise’s LabODD co-organised a series of events, both online and in-person, aiming to share lessons learned and exchange experiences between social investors and FSPs. These events included the Outcomes Management Workshop Series online meetings with Investors (13 September) and FSPs (20 September); the Outcomes Sessions at the Cerise + SPTF Annual Meeting 2022 (28 & 29 September); and the European Microfinance Week (EMW) 2022 Panel Session ‘The Drivers for Better Outcomes’ and Working Session (16 November).
During these events, participants shared concrete experiences and discussed the potential standard indicators as well as the necessary willingness to understand changes experienced by customers. They have also considered the relevance of data quality, the challenges of collecting it, and the capacities needed to conduct data analysis and use its findings in decision-making.
During the e-MFP Investors AG and LabODD Working Session at EMW 2022, it was rewarding to see significant contributions to harmonising outcomes management from social investors and responsible FSPs, with two investors sharing their experiences. Kawien Ziedses des Plantes, Sustainable Impact Manager at Oikocredit, presented the methodology used and the lessons learned from their survey program focused on clients’ perceptions of change. She highlighted how the program reached 18,500 end-client respondents and contributed to integrating the voices of clients in the process of improving products and services. Subsequently, Mathilde Bauwin, Head of Knowledge Management at ADA (Appui au Développement Autonome), shared how ADA structured a sample questionnaire that follows the theory of change for a financial services provider (FSP), with the objective of identifying the outcomes of the services offered to the clients, understanding how these outcomes occur (contribution vs. attribution), and providing useful information for the FSP to improve their services. In her presentation, she emphasised how this methodology is applicable to different sectors. Throughout the different events organised in 2022, discussions focused on agreeing on a common set of outcome indicators and a core social outcome questionnaire to collect reliable and useful outcomes data from the end clients. Based on the results of these discussions, during the working session at EMW 2022, Cerise+SPTF presented a proposal for the outcome questionnaire and list of potential standard outcome indicators. These tools aim to support both FSPs and the related stakeholders (e.g., investors, networks, regulators) in collecting and analysing relevant data that contributes to informed decisions for building strong social and environmental strategies and operations, to ease the reporting to the various investors, and to better understand the impact of financial services on the end clients.
Participants in the session were asked to review the proposed questionnaire and provide feedback. Investors and other stakeholders have noted several points to refine the questionnaire, including reviewing details of questions/indicators to be adapted to different contexts/types of FSPs and avoid redundancies; adding questions on consumer risks such as fraud, hidden fees or agent relation risks; and discussing the link with the Financial Health/Customer Outcomes Framework proposed by CGAP, as presented by WSBI.
As of now, the Cerise’s LabODD team is summarising the feedback received and will host a co-development workshop on May 4, 2023, aiming to collect the last inputs from investors and FSPs on the proposed questionnaire and list of standard outcome indicators and to provide simple guidance for field surveys on customers. These will be included in the new version of SPI Online assessment tools by the end of 2023. Bearing in mind that the better the FSPs understand the changes experienced by their customers, the better decisions they can make to further implement their social and environmental objectives, the on-going collaboration here presented - result of extensive work from multiple sector stakeholders - gives a roadmap for this.
About the Authors:
Célia Fernandez, leads all internal and external communications, including social media, and also manages internal administration for Cerise. As part of the SDG Project (LabODD in French), Célia facilitates working groups and gives training on outcomes measurement. She holds a master’s degree in human rights and humanitarian action from Sciences Po Paris. She has 5 years’ experience in project management for NGOs in Morocco, as well as experience as a Quality Manager (ISO 9001 Standard 2015 version). She speaks French and English.
Joana Afonso is Financial Inclusion Specialist at the European Microfinance Platform (e-MFP) where she coordinates the e-MFP Action Groups and is a member of the content team working on the European Microfinance Week, European Microfinance Award and e-MFP research related activities. Joana has experience both as practitioner and researcher in the financial inclusion sector. She has previously worked as a microcredit officer at an NGO in Portugal and conducted research on client over-indebtedness and impact evaluation methodologies in microfinance, with field work in the Dominican Republic, Pakistan, Zimbabwe, and Ecuador. She is co-editor of the book “Emerging Challenges and Innovations in Microfinance and Financial Inclusion” (2019). She holds a PhD in economics and finance from the University of Portsmouth, UK, and a masters in microfinance from the Université Libre de Bruxelles, Belgium.
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