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Seal of Excellence for Poverty Outreach and Transformation in Microfinance - Indicators USSPM = link to SPTF standards Link to smart

campaign – client protection A. Background Data - Country Dimensions Indicators 1. Country Development / - National poverty line - in local Poverty Profile National currency/household (HH)/month data, Progress out of - - % HHS below national poverty line poverty (PPI) docs - Source and date of data - Data by relevant international poverty lines ($1.25 - $5 at purchasing power parity - PPP) - each poverty line - local currency/HH/month and % HHs below line 2. Human Development - health, education, other Index (HDI) ranking, key - Per Capita Gross National income development indicators (GNI), date 3. Regional Development - More developed/less developed regions within country Vulnerable Communities - As identified for the country - with % of households B. Background Data – Financial Institution Dimensions Indicators 1. Organization - Legal Form - Year started 2. Services - List of Financial Services - List other Services or linkages 3. Scale - Clients – Borrowers - Borrowers previous year Members/Borrowers/Savers - % growth - Portfolio ($) (mn) - Portfolio ($) previous year (mn) - % growth 4. Model - % group borrowers - % individual borrowers 5. Geographic area - % rural borrowers - % urban borrowers 6. Women clients - % women clients 7. Women staff - % women on the Board, management team, and field staff 8. Mission, Strategy identifies social goals aligned to the Seal: USSPM 1a. 1,3 Serving poor people Serving low income people Poverty Reduction Other Developmental Objectives: employment, improved quality of life, reduced vulnerability, women's empowerment, health ….
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Note Context to assess potential outreach of microfinance in the country and reference to product size

Identifies poorest countries

Note Descriptive profile Reference for later analysis

1. Qualifying Standards Dimensions 1.0 Financial Sustainability Indicators
Accounts externally audited last 2 yrs Return on Assets (RoA) – positive Portfolio yield - reasonable Operating Expense Ratio – indication of costs Financial Expense Ratio – cost of funds for onlending Portfolio at Risk (PAR) - 30 days

Note Indicate self reported vs. rated data. Related to USSPM 6b.1-2, 5, 8; 6c, see 1.6 below

SPTF Universal Standards 1.1 Define and monitor social goals

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1.2 Ensure Board, Management, and Employee Commitment to Social Goals

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1.3 Treat Clients Responsibly

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1a: The Institution has a strategy to achieve its social goals. 1b: The Institution collects, reports, and ensures the accuracy of clientlevel data that are specific to the institution’s social goals. 2a: Members of the Board of Directors are committed to the institution’s social mission. 2b: Members of the Board of Directors hold the institution accountable to its social mission and social goals. 2C: Senior management sets, and oversees implementation of, the institution’s strategy for achieving its social goals. 2d: Employees are recruited, evaluated, and recognized based on both social and financial performance criteria. 3a: The institution determines that clients have the capacity to repay without becoming over-indebted and will participate in efforts to improve market level credit risk management. 3b: The institution communicates clear, sufficient and timely information in a manner and language clients can understand so that clients can make informed decisions. 3c: The institution and its agents treat their clients fairly and respectfully, and without discrimination. The institution has safeguards to detect and correct corruption as well as aggressive or abusive treatment by their employees and agents, particularly during the loan sales and debt collection processes. 3d: The institution respects the privacy of individual client data in accordance with the laws and regulations of

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Relevant indicators are included as part of the core standards and specifically applied to poverty outreach and transformation Indicators developed through Smart Campaign and Social Performance Task Force (SPTF building on Smart Principles: highlighted in gray). See SPTF Full Standards document for complete details.

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1.4 Design products, services, delivery models and channels that meet clients' needs and preferences

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1.5 Treat Employees Responsibly

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1.6 Balance Financial and Social Performance

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individual jurisdictions and only uses client data for the purposes specified at the time the information is collected or as permitted by law, unless otherwise agreed with the client. 3e: The institution has timely and responsive mechanisms for complaints and problem resolution for their clients and uses these mechanisms both to resolve individual problems and to improve products and services. 4a: The institution understands the needs and preferences of different types of clients. 4b: The institution designs products, services, and delivery channels in such a way that they do not cause clients harm. 4c: The institution’s products, services, delivery models and channels are designed to benefit clients, in line with the institution’s social goals. 5a: The institution follows a written Human Resources policy that protects employees and creates a supportive working environment. 5b: The institution communicates to all employees the terms of their employment and provides training for essential job functions. 5c: The institution monitors employee satisfaction and turnover. 6a: Growth rates are sustainable and appropriate for market conditions, allowing for high service quality. 6b: The institution’s financing structure is appropriate to a double bottom line institution in its mix of sources, terms, and desired returns. 6c: Pursuit of profits does not undermine the long-term sustainability of the institution or client well-being. 6d: The institution offers compensation to senior managers that is appropriate to a double bottom line institution.

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2. Seal Standards – Include Poor Households Dimensions 2.0 Intent – poverty outreach Indicators - USSPM – 1a.1, 2, 4 - In stating intent to serve the poor or low income, the MFI refers to a level which includes the bottom 20-40% of households in the country 2.1 Practices that Support - USSPM 4c.1, 4b.5, 4a 6 (additional) Poverty Outreach Location of offices - % in underserved, remote areas; regions with above average poverty rates (ref A.3) - % clients in these regions - Addressing staff biases (e.g. to poor, marginalised groups) through culture and incentives - Addressing bias in group selfselection - Timing of meetings for groups (adaptation to suit poorer clients) - Fees – minimal USSPM 4b.9 - Type of collateral - manageable by poor people: % borrowers without collateral, requirements in the application process - e.g. registration docs) - Including start ups for enterprise lending (% startups of total enterprises funded in previous year) 2.2 Poverty Measurement – - MFI measures regularly as part of entry clients own operations? 1b1-4; 9 (Annex) with - Tool/indicators reference to outreach to - Verification of quality of data poor households collection - and checks in place USSPM2b1-2, 2c1-3,4 - Assessment of reports, who accesses, are reports used to adapt approach and services USSPM 1b.6 2.3 Results - poverty outreach at entry benchmarked (as relevant for country) Other Quality of Life Indicators Outreach to Vulnerable Communities Publicly reports %<National poverty line % <$1.25 at PPP % < $2.5 at PPP % < $5 at PPP (or significant number) Profile of entry level clients on selected indicators % total clients from such communities Note

The MFI has identified the barriers of poor people to entry, and designed its entry requirements to address those barriers

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Tools include: PPI, Poverty Assessment Tool (PAT), food security index, other indicators of vulnerable communities Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services Reference Background (A.1) Level that reflects the bottom 20-40% of households in the country Reference Background (A.3) Reference Background (A.3)
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3. Seal Standards – Appropriate and Quality Financial Services Dimensions 3.0 Financial products and services adapted to known needs and preferences of poor clients - 4b1-3 & 4; 4c.3 4c.4 wrt poor households 3.1 Access by poor clients to different products -

Indicators - Product design (not just enterprise credit) reflects understanding of cash flows and livelihoods of poor households: examples of products, services or adaptations to serve the needs of poor clients, at entry and over time Access analysis - % poor clients accessing different products First loan size as % per cap GNI First deposit size as % per cap GNI CPP 5 Systems to distinguish 'can't pays' from 'won't pays' and appropriate responses in arrears management
(not just zero tolerance of delinquency)

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E.g. Market research/ feedback conducted and analysed to highlight requirements of poor households; product design responds to these requirements, with adaptation to different needs of clients at different stages (loan cycles)

3.2 Protection for vulnerability (esp for poor clients)

Guidelines may be around: <20% per cap GNI <1% per cap GNI Practices to recognise and support clients through situations of vulnerability

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USSPM 4c.2

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3.3 Monitoring and use of client feedback USSPM 4a1-2, 1b, 4a.4 (additional); 4c.4 wrt poor clients USSPM2b1-2, 2c1-3,4,

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3.4 Results/findings 3.5 Tracking and use of information about client exit USSPM 4a3, 1b wrt poor clients USSPM2b1-2, 2c1-3,4 3.6 Results – client retention/exit

Rescheduling of loans in circumstances of catastrophe guidelines and documentation Savings products for emergencies % clients Insurance products that respond to most important risks for poor clients - % clients who access Regular mechanism to monitor client feedback – specifically collected and analysed for poor clients Describe mechanism (including frequency, sampling ...) Who uses the results Uses feedback to improve products and services Examples of such use % poor clients satisfied Periodically tracks reasons for client exit, including analysis for poor clients tracks client retention or exit rates; analyses rates for poor clients; Uses results to improve services % exit of poor clients within ‘acceptable’ range

Disaggregate data men/women as relevant Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services

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Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services

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4 Seal Standards – Appropriate non-financial services (option – with own delivery or linkage) Dimensions 4.0 Strategic selection of Non Financial Services Indicators - Basis for MFI identifying this NFS Permanence/regularity of the service offered: Grant funds? Allocation of own resources - % profits, staff time #/% poor clients in past one year – significant access (guideline min 25%, though this may vary depending on type of NFS) Regular mechanism to monitor client feedback and value of services Who uses the results Use of feedback to improve services Examples of such use Note

4.1 Access to NFS

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4.2 MFI monitors quality of non-financial services USSPM 4a1-2, 1b, 4c.4 4a.4 (additional) wrt poor clients and non financial services USSPM2b1-2, 2c1-3,4,

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Repeat for different NFS as applicable
Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services

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4.3 Client feedback on nonfinancial services

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Feedback results analysed for poor clients - % satisfaction

5 Seal Standards – Change over Time Dimensions 5.0 Intent – to contribute to positive change for clients, poverty reduction 5.1 Measures change over time for clients who were poor at entry - indicators of poverty reduction, transformation Indicators - USSPM 1a1,3,6 wrt outcomes for clients who were poor at entry USSPM 1b.5, 1-4, 8-9 (Annex) wrt to poverty reduction, transformation Describe mechanism (including agency, sampling, frequency ...) USSPM2b1-2, 2c1-3,4 Uses results to improve products and services? Examples of such use USSPM 1b.6 Publicly reports Note

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(credible method and analysis, not necessarily Randomised Control Trials RCT; incorporates theory of change and alternative uses/access to different services –financial and any nfs) Assess a) scope and quality of data collection and reporting b) MFI use of the data to improve products and services

5.2 Results – outcomes for clients over time

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Findings – positive trend, for clients poor at entry

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6 Seal Standards – Additional values Dimensions 6.0 Gender Equity – intent to serve women, and gender profile of the MFI MFI Responsive to Gender Concerns - clients Indicators - USSPM1a.1 - Gender profile – staff and clients ref Background B6 and B7 USSPM 1b.3, 4a, 4b, 4c MFI disaggregates data on dimensions of standards above for men/women clients (as relevant) USSPM2b1-2, 2c1-3,4 MFI uses gender disaggregated data to ensure outreach to poor women and appropriate services for women clients MFI monitors loan pass by women clients gender assessments/evaluations findings and use % clients who are women heads households % loan pass (by women clients) Client satisfaction, exit for poor women clients Outcomes – for women clients USSPM 5c – but needs more Note Substantive indicators being developed by WWB Gender Performance Indicators project

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Findings, results (clients) -

MFI responsive to gender concerns – staff Findings, results (staff) 6.1 Client Voice in Governance Effective client role in guiding the institution whether as owners (cooperatives) or through other membership or representational structures

Effective cooperative structure Effective mechanisms in other type of structures Clients contribute to determining policies, ensuring appropriate products and services; have a part in decisions to allocate profits.

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