The Seal of Excellence for Poverty Outreach and Transformation in Microfinance is a global initiative currently under development that will recognize those institutions doing the most to help families lift themselves out of poverty. The Seal has been under development the past 19 months with input from a broad range of stakeholders and will continue in 2012. This PowerPoint illustrates how the Seal fits in with current initiatives and how it has developed over time.

2. Social Performance
Client Protection Principles + Institutional Commitment
Seal of Excellence
for poverty
• Invest in systems to outreach and
Different Actors
Smart Campaign manage double / triple transformation
bottom line
MFT
• Measure client outcomes
• Tailor services to client
need and vulnerability
Investor Principles for Inclusive
Finance
Responsible Finance Improve Clients’
(do no harm) Lives

3. Expectation for every
Smart Campaign Client financial provider – do
Protection Principles no harm
Universal
Standards for
Social Expectation for double
or triple bottom line
Performance
organizations
Seal Expectation for an
of organization with a
Excel specific mission of
lence poverty reduction and/
or transformation

4.  The initiatives are separate but complementary
 Our recommendations are NOT separate – we endorse each
other
 MIX reporting incorporates the thinking among the Smart
Campaign, MFTransparency, and the Social Performance Task
Force
We are all talking to each other!

5.  Six principles of client protection:
1. Appropriate product design
2. Transparency
3. Responsible pricing
4. Responsible treatment of clients
5. Effective complaints resolution
6. Privacy of client data
 Certification: The Smart Campaign is currently developing
criteria and a process by which MFIs can be recognized for meeting
client protection standards
 Timeline: Planned launch of the pilot phase of certifications in
2012

6.  Main areas of focus:
1. Transparent prices
2. Fair prices
 Calculation transparent prices tool: Excel-based tool allows
users to input different loan terms and see how they affect Annual
Percentage Rate (APR) and Effective Interest Rate (EIR), total cost
of credit, cash flow and repayment schedule. Put simply, it
clarifies how much the client is paying / the MFI is charging for a
given loan.
 Timeline: MFT collects and publishes microfinance interest rate
data for individual countries, 7 countries to date and 10 more
pending.

7.  SPTF is developing universal standards in six areas:
1. Responsible Financial Performance
2. Governance and Staff Commitment to Social Goals
3. Products and Services that Meet Client Needs
4. Client Protection – Six Principles of Client Protection
5. Social Responsibility to Staff
6. Client Monitoring
 Overlap with Smart Campaign: While SPTF fully endorses the Smart Campaign’s
client protection principles, the universal standards do not require the same level of
performance as does Smart Campaign certification. Instead, the universal standards
prescribe introductory steps in each of the six areas of CP.
 Timeline: Proposed standards presented for discussion at the annual meeting in Den
Bosch in June 2011. Standards in areas where enough data already exist ready in 2012.

8.  Purpose: MIX collects and validates financial, operational, product,
client, and social performance data from MFIs in all regions of the
developing world, standardizing the data for comparability.
 News:
 MIX, in collaboration with the SPTF, recently refined and released
an updated set of social performance indicators. Data collection on
these indicators will begin in March 2011.
 MIX is developing a survey to pilot additional questions related to
social performance. The survey should be completed by June 2011.
 MIX has recently upgraded its website to make the financial and
social profiles of individual institutions more accessible.

9.  Seal is an initiative currently under discussion:
 Envisioned by Microcredit Summit as a separate
initiative to promote excellence in poverty alleviation
and transformation.
 Builds on the Smart Campaign’s client protection
principles and the Universal Standards work of the
Social Performance Task Force
 Discusses using systems for validation that have
already been developed for rating social performance of
microfinance institutions

10. Client Protection Principles and Universal Standards Align and Overlap; the
Seal Applies to Both Sets of Standards Plus a Poverty Reduction Mission
Smart Campaign Universal
Certification on CPP Standards on SP
Demonstrated Demonstrated :
excellence in all six • Implementation of the
client protection basic elements of every
principles client protection principle
• Social performance
activities in six key areas
Seal
Awarded for excellence in poverty
outreach and transformation

11.  Report your institution’s financial and social performance data to MIX
 Sign on to the Client Protection Principles and get your member
organizations certified
 Sign on to the MFTransparency endorsement statement. Use the
MFTransparency calculator to calculate and report your interest rates
 Conduct a social audit and/or Commission a social rating
 Provide input to the development of the Seal of Excellence
 Become a member of the Social Performance Task Force to learn more
about the ongoing work of these initiatives and to participate in
trainings and conferences that can advance your work in this area
 Attend the annual Social Performance Task Force meetings where we
will continue these discussions. The 2011 meeting is June 19-23 in Den
Bosch, the Netherlands
Join, support, and strengthen current initiatives rather than
creating another one

12. ISEAL:
International Social and Environmental Accreditation and
Labelling Alliance

13. • RESPONSIBLE ++ & DEPTH & EFFECTIVE
• Linked or direct strategies to support client development
(livelihood, health, children’s education)
Gold • Evidence of access (at least 20% of clients) and value to clients
• Significant and fair wage employment (SME lending)
• Environmentally sustainable lending
• RESPONSIBLE+ & DEPTH OF OUTREACH
•Less developed areas, poor and excluded households at entry (Linked to country context,
and use of PPI (at least = country average and monitored)
Silver •Or SME lending for wage employment
•Gender diversity
• RESPONSIBLE MICROFINANCE :
•Client protection principles + financial education for clients
•Standards around governance (level and allocation of profits ; remuneration to CEO (vs
Bronze portfolio size and av. remuneration to average field staff)
•Conditions of staff employment
•SME lending – environmental standards

14. Governance/ Responsible financial guidelines
1. Reasonable level of profitability: [guideline - RoA slightly above
the bank sector, to allow for additional risk - may differ by
country];if high, then clear rationale and evidence of allocation
that benefits clients
2. Reasonable annual growth rate [guidelines for portfolio growth
could be as follows: < 50% for Tier 3 MFIs, 40% Tier 2, and 25%
Tier 1]
3. Remuneration to CEO is transparently reported and is not more
than the equivalent level in the country's private banking sector
4. Remuneration to CEO in comparison with lowest paid field
officer is not more than a ratio of x

15.  Outreach to less developed areas
 Outreach to poor households
 Client retention
 Gender equity - opportunities for women

16.  Non-financial services to support clients in
their businesses or other improvements in
quality of life
 Client ownership
 Evidence for contribution to poverty
reduction

17.  A core group will likely drive the process: (Interim
Steering Committee) should represent different potential interests for
legitimacy
 Determine the need for the standards: how to complement
existing standards, and avoid duplications or contradictions
 Know your stakeholders and communicate with them
 Have clearly defined objectives: Define objectives in concrete
terms as the change you would like to see.
 Define procedures for the standards development
process: stakeholder mapping, participation, and documented
response
 Decide the end use of the standards: intended as voluntary
guidance on good practice? To be widely applicable across the industry?