Since 2001, the Solidarity Finance workshop has focused its interest on the issues of financial tools, used in the North as well as in the South. Its objectives is to make basic financial services accessible to the poorest populations (mainly on saving and credit). The proceedings were focused on an underestimated topic: the relations between solidarity finance and social ties.

A certain number of questions or intuitions guides the reflections of the Solidarity Finance workshop:

1) the crises MFIs are confronted with these last years (drop-out clients, inactive groups, bankruptcies, etc.) question the motto of profitability. Is there a link between this “forced march” towards profitability and the collapse of social ties on the one hand, and freezes and dysfunction on the other? Is Micro Finance suffering from a failure to create and maintain social capital among its clientele, and from a failure to build up social ties between clients and between clients and institution?

2) can the social objectives of a MFI have positive consequences on its clients and their community: how to measure them and take them into account and recognize the work of these institutions? And take account of their work.

3) on the long term, MFIs social performances reinforce their sustainability : solidarity microfinance has some specific costs (clients and groups capacity-building, information and transparency, special care for social ties, etc.) but its approach can also generate reductions of costs (improved portfolio quality, increased clients loyalty, client participation to follow-up, repayment discipline due to appropriation of program by clients, increased productivity of credit agents based on client and group training, etc.). Building social ties and social capital between an institution and its clients is a slow process but on the long term, costs can decrease. Solidarity finance is thus not a “welfare benefit”. It is a form of finance that is all the more effective because it takes the existing social situation into consideration.

Since 2003, the Solidarity Finance workshop chose to deepen these reflections in order to define professionally solidarity finance (specific skills, professional activities, management and operational standards) and to raise the lenders awareness concerning the concept and foster their interest in solidarity finance and in the creation of incentives for MFIs.

The workshop participants, in the continuation of their work to have the Solidarity Finance added value recognized by governments and donors, decided to concentrate its efforts on translating these practices into performance indicators to be monitored and reported. The development and experimentation of social performance indicators will help reajusting the balance when judging the overall performance of institutions, along with the financial performance indicators that currently monopolize the rating systems.

We are glad to invite you to take part to a « virtual feed-back » of the work, still under progress, we have done in the Social Performance Indicators initiative framework.
The SPI objective is to define an easy-to-use tool to measure the social performances of the MFIs. The second stage (june-december 2004) was to experiment this tool with 25 MFIs.

We are happy to associate you to this feed-back, that will end the second stage of SPI exchanging information and comments about what went on during these last months.

The SPI questionnaire is available on this site, in the SPI Feed Back 12/2004 section and you can also read all the comments that have been made in the archive forum section.