PRESS RELEASE: Innovative Collaboration Aims to Bring Greater Transparency to Sub-Saharan Microfinance

Wednesday, October 22, 2014

NEW YORK – October 20, 2014 – Aiming to bring greater transparency to microfinance across Sub-Saharan Africa, Catholic Relief Services (CRS), The MasterCard Foundation and Moody’s Analytics have launched an innovative collaboration to use Moody’s Analytics’ social performance assessments (SPA) to help microfinance institutions better measure and manage their long-term social impact.

The performance of 12 microfinance institutions operating in six countries across Sub-Saharan Africa will be reviewed. The institutions being assessed all receive technical assistance from CRS through its MISION Africa project, which is supported in part by The MasterCard Foundation. The Foundation will co-fund the assessments to gauge the efficacy of MISION Africa’s Social Performance Management (SPM) initiative, which promotes best practices for microfinance institutions.

Moody’s Analytics will provide independent analyses of the institutions based on its SPA methodology, which evaluates how well a microfinance institution oversees, manages and monitors its performance as it seeks to achieve its social goals. Results of the SPAs, which include scoring on 144 social performance factors, will provide data for the microfinance institutions and their stakeholders to help better manage risks and improve outcomes.

“By providing technical and financial support, and seeking independent assessments of these 12 microfinance institutions, MISION Africa is helping them build on the work they have done to integrate social performance metrics into their performance management systems,” says Babacar Sambe, MISION Africa Project Director.

Support from CRS extends the work it has done since 2006, when it began to promote SPM principles and practices to help microfinance institutions deliver on their social missions. In 2010 CRS launched the MISION Africa Project to bring practical SPM resources to microfinance institutions in Benin, Burkina Faso, Ethiopia, Kenya, Senegal and Uganda. This project has led to greater adoption of SPM practices throughout Africa, assisted by well-trained local consultants.

“Implementation of Social Performance Management by financial service providers has been an important objective in promoting responsible finance,” says Ann Miles, Director of Financial Inclusion at The MasterCard Foundation. “The assessments undertaken by Moody’s Analytics will result in deeper understanding of the progress made by these institutions and help us to identify areas in which more work needs to be done.”

Moody’s Analytics’ SPAs are based on its social performance assessment methodology, which uses a comprehensive scoring system and field assessments to provide in-depth analysis of a microfinance institution’s practices and a globally comparable assessment grade of its ability to achieve its social objectives. Moody’s Analytics has completed SPAs for a range of microfinance institutions in Africa, Asia and Latin America.

“Microfinance institutions have the potential to be a powerful force for economic development in Sub-Saharan Africa, and we are pleased to be part of this innovative collaboration among for-profit and not-for-profit organizations to bring greater transparency to how well microfinance institutions achieve their social goals,” says Jody Rasch, Senior Vice President, Social Performance Group at Moody’s Analytics.

Source: MasterCard Foundation (link opens in a new window)

financial inclusion, microfinance