The MicroLoan Foundation has held its first open evening to introduce friends and donors to the benefits of its new programme of social performance management.
Since 2008 the scale of MicroLoan’s operation has increased dramatically. In Malawi there are now 20 branches country-wide and the charity has an active client-base of over 21,500, half of whom live on less than £1 per day. The charity has also expanded into the eastern province of Zambia where there are two branches, and a new operation has just opened for business in the north of Namibia.
Based on its experience in Malawi, MicroLoan is very successful in reaching clients across the country, achieving excellent repayment rates on loans, and generating positive social results evidenced by individual testimony. However, as the scale and complexity of its work increases, the charity has become more aware of the need to provide robust and statistically valid evidence of the effectiveness of its central objective – to enable the poorest women to work their own way out of poverty.
As a result, the charity has set out to develop what it describes as the “double bottom line.” This means not simply measuring its effectiveness against the conventional parameters of financial performance, such as repayment rates, but also against the social indicators which show how effective it has been in helping its clients out of poverty. These social indicators must be assessed, managed and reported as systematically as their financial counterparts. For MicroLoan to be effective it is vital to ensure that the right clients are being reached, that their needs are being met, and that the charity evolves to meet these needs, and ultimately that what it does is effective in raising their standard of living.
In order to determine the key areas to concentrate on during this process, field research took place earlier this year. Focusing on the training programme for new clients, exit surveys for those leaving the programme, and poverty outreach to establish where the poorest women are to be found and what their needs are, the results were then fed into a series of workshops. In this way both management and field staff have been able to assist in the development of a strategy to ensure that MicroLoan is meeting its central objective as effectively as possible.
This process has identified the following areas for development as part of the Social Performance Management objective:
- Greater outreach to the poorest women via new products which are currently being piloted;
- Tracking changes in the poverty status of new, ongoing and exiting clients to ensure that their standards of living are improving, and to make sure that the most vulnerable people benefit from being part of the programme;
- Integrating more adult learning activity aimed at those without formal education into the training programme;
- Strengthening procedures to make sure the size of an individual loan is appropriate to the relevant client’s business;
- Ensuring support structures are in place for clients whose businesses go wrong;
- Reducing the number of clients leaving the programme by focusing on the above.
MicroLoan is now rolling this strategy out to all its branches in Malawi and will be looking to follow suit in Zambia and Namibia where appropriate.