NB Financial Health
Leading From the Front: How we helped develop the Truelift Assessment Tool, and why MFIs should use it
There will always be skepticism about the microfinance industry’s initiatives to promote transparency. Nevertheless, at Freedom from Hunger, we’ve always taken an outspoken stand. We’ve consistently called for microfinance organizations to refocus their efforts and do more to serve their clients (see also: No Silver Bullet). The industry must continue to learn and evolve, and adjust as needed, to meet the needs of the global poor.
Consistent with this mindset, the Truelift initiative was launched in 2010 by Freedom from Hunger, the Grameen Foundation, Kiva and the Microcredit Summit Campaign, with support from the Ford Foundation, Michael & Susan Dell Foundation and Deutsche Bank. Truelift is a global initiative to promote accountability and learning in pro-poor development. We view it as a trust mark, signifying a commitment to positive and enduring client outcomes for people living in poverty. With the dramatic growth of social enterprise, we believe the initiative is exceedingly important and will help others learn from some of microfinance’s early missteps.
Freedom from Hunger and other organizations also provided conceptual and technical leadership to help drive the initiative. My predecessor, Chris Dunford, continues to serve as a co-chair of the Truelift Steering Committee and our Research & Evaluation Specialist Bobbi Gray is a member of Truelift’s Microfinance Technical Review Committee. (Click here for more information.)
In October at the Microcredit Summit Campaign Partnerships Against Poverty Summit in Manila, two of Freedom from Hunger’s partners – the Small Enterprise Foundation (SEF) in South Africa and Finca Peru – were among the first microfinance institutions (MFIs) to be recognized as “Truelift Achievers.” Shortly thereafter, Grameen Koota in India was added to this illustrious list.
Now, we are delighted to report that CRECER, Freedom from Hunger’s partner in Bolivia, has been recognized with the highest level of recognition offered by Truelift. In achieving this, CRECER joins Indian MFI Cashpor as one of only two MFIs, to date, to achieve this leadership designation. But here’s why we’re so excited by the possibilities of Truelift for the future.
How is Truelift different?
Truelift starts with a simple question: Are you serious about helping people lift themselves from the depths of poverty?
Truelift considers an organization “pro-poor” if they can provide evidence showing that they are:
- intentionally reaching people living in poverty;
- designing and adapting products and/or services specifically for people living in poverty; and
- tracking the progress of their clients toward meaningful improvement in their lives.
Truelift requires that poverty-focused institutions provide credible evidence to support their claims and determines whether they are implementing tracking methods to help inform their decision-making processes.
Truelift offers an assessment tool
Truelift commissioned a technical committee with extensive experience in social performance assessment (members include CERISE, M-CRIL, MicroFinanza Rating, Planet Rating, Freedom from Hunger, Grameen Foundation, Smart Campaign and other independent experts) to develop a pro-poor performance assessment tool, which is available for free on the Truelift website.
The Truelift assessment builds upon existing tools already developed for client protection and social performance management. Practitioners may use it for self-assessment to identify their strengths and weaknesses in reaching poor clients – meeting their needs and tracking progress over time. The assessment can also be used by approved third-party verifiers and rating agencies that are licensed by Truelift to verify self-assessments or provide external assessments, which are considered objectively valid by the international development community.
The goal is to get well-intentioned organizations moving in the right direction to achieve their own pro-poor objectives. Organizations can also use the assessment tool to understand where they currently stand on the path toward full pro-poor performance. Once they know that, they can chart the next steps toward a more focused action agenda.
Truelift offers recognition of progress
It’s important to recognize organizations that are doing the right thing and trying to be accountable when it comes to their pro-poor agenda. Practitioners who submit self-assessments or external assessments to Truelift are recognized on its website, at international meetings and in publications. There are four milestones along the pro-poor path: Aspirant, Emerging Practitioner, Achiever and Leader.
These designations reflect not only an organization’s commitment and performance on pro-poor activities, but also the strength of evidence that validates it. The milestones also help identify organizations that are at the same stage in their journey. This encourages collaboration and sharing among organizations that may be dealing with similar challenges in new and creative ways. Organizations can also look to others who are further along the path to identify best practices.
For an MFI to be recognized as a Truelift Leader, it must also be certified by the Smart Campaign as adhering to the Client Protection Principles, the foundation upon which pro-poor performance is built. Most MFIs have not yet been certified due to the cost and short time that certification has been offered; this presents a fairly high threshold for recognition at the Leader Milestone.
Truelift offers a community of practice
Reflecting its initial focus on microfinance providers, Truelift established a Poverty-focused Microfinance Community of Practice that offers its members a newsletter, educational events and resources. However, to be truly effective, communities of practice rely on both the engagement of members and a menu of events and resources that enable members to come together to learn from each other, both virtually and in person.
Truelift offers access to technical assistance
Truelift was established to encourage more practitioners to pursue a pro-poor development agenda. It aims to provide a mixture of access to technical assistance as well as funding to help MFIs pay for these services. This, however, requires substantial funds. In the interim, Truelift strives to enhance the range of resources available to practitioners and others for free through its website.
Freedom from Hunger’s partners SEF and Finca Peru were among the nine MFI hosts of the first field tests of the Truelift pro-poor performance indicators. We are pleased, but not surprised, that they have been recognized as Truelift Achievers. We are also delighted by the recognition of CRECER as a Truelift Leader; an appropriate acknowledgement of the organization’s many years of service to the poor.
When Freedom from Hunger selected these institutions as partners we didn’t have the benefit of this type of in-depth measurement tool. We knew from our internal assessments that these organizations were making determined progress toward our shared pro-poor agenda. However, with the creation of the Truelift definitions and assessment framework, our organization, partners and microfinance funders who share our commitment to the poor now have an important mechanism to help guide and validate their efforts and ensure they are truly making concerted progress toward pro-poor development.
Steve Hollingworth is president and CEO of Freedom From Hunger.
- Impact Assessment