23 Nov

Webinar on Social Performance Management: The role of HR and internal audit in supporting social performance

Event Webinar

Share

Objective
The webinar is the third in a series of three webinars on social performance management. The objective of the webinar is to understand the role of incentive systems and training in social performance. The webinar will also explore the role of internal audits in supporting social performance.

Guest Speakers
Kinga Dabrowska, Project Manager at the Microfinance Centre

Outputs

  • Download the presentation below the video
  • Did you miss the webinar? Watch the recording of the session below

The role of HR and internal audit in supporting

social performance

Thursday 23 November 2017

12.00-12.45

- Caroline Lentz | EMN | c.lentz@european-microfinance.org

- Kinga Dabrowska | MFC | kdabrowska@mfc.org.pl

mailto:c.lentz@european-microfinance.org
mailto:kdabrowska@mfc.org.pl

• EMN has supported various SPM activities over the

years:

➢ EMN Working Paper: “European microfinance and social

performance: where do we stand?” bit.ly/2fymWrR

➢ Workshops in previous EMN Annual Conferences

➢EMN-MFC Think Tank on SPM focusing on integrating a “more

social lens” into the Code of Good Conduct.

EMN and the initiative

Do you have any questions?

You can leave your comments or questions in this chat box. They will be visible to presenters and organisers only.

What are the key issues around HR and IA in SPM?

Webinar objectives

1. Discuss the key issues around HR and Internal Audit/Control in SPM

2. Discuss examples

3. Identify technical resources

Human resources – key SPM issues

• Candidate’s profile matters

• Staff education and regular reporting on SP results

• Bonus system and incentives

• Social institution and unfair treatment of staff?

Which candidate for LO is better?

Target group: poor farmers and entrepreneurs from rural areas of Italy

Candidate 1 Candidate 2 Candidate 3

Gender, age Male, 32 Female, 28 Female, 25

Marital status Married with one child Married Single

Education Economy graduate (University)

Development studies graduate (University)

Accounting & management graduate (collage)

Work experience

Commercial bank: 4 years Social work office: 2 years

Local NGO 2 years 4 years of work in family business (grocery)

Background Capital city Capital city Local community

Staff education

• Introduction training

– Classroom

– On the job

• On going training

Example 1: Bonus stands for up to 60% of salary

Bonus =

Example 2: Bonus stands for up to 60% of salary Precondition to receive bonus: [PAR<30 days] must be lower

than 1,0%

Bonus= PAR < 30 days 0,5 %

* 0,5 + # rural clients

# clients

New portfolio disbursed

Planned new portfolio disbursed * 0,35 + * 0,15

PAR < 30 days portfolio disbursed

planned portfolio disbursed * 0,6 + * 0,4

0,6%

What does the bonus formula tell us?

Staff incentive system

Staff do what they are compensated for

Balancing bonus system

What are the key issues around internal audit in SPM?

• Verification:

✓ procedures and practice

✓ quality of data collected

✓ social performance criteria integration into regular activities

Key aspects

Examples of tasks (1)

• At client level: ✓ Check average loan processing time

✓ Spot-check loan officers’ repayment capacity calculations

✓ Spot-check loan collection approaches

✓ Interview clients to assess their knowledge of service terms and conditions, and soliciting feedback on client–staff relationships

✓ Check how complaints are resolved

Examples of tasks (2)

• At Staff level: ✓ Check diversity of selected candidates against

applicants

✓ Check salaries for gender and other biases

✓ Check compliance with local law and transparency of salary scale

✓ Check staff awareness about the Code of Ethics and other procedures

The role of IA in preventing over-indebtedness – example from Partner, BiH

• IA questionnaire for clients: ✓ Did the loan officer visit you before loan disbursement? ✓ Who are the guarantors of your credit? ✓ Did you personally sign the contract? ✓ Did you personally collect the loan disbursement? ✓ Have you been using the loan yourself or jointly with

other people? ✓ Did you have to pay any charges besides the loan fee and

installment? ✓ What was the purpose of the loan? What did you invest

money in? ✓ What problems are you having repaying the loan (if not

repaying on time)? ✓ Does anyone in your household have other loans from

Partner? For how much?

The challenges for Audit in SPM

• A representative sample of clients

• Focus on Internal Audit on « mistakes » (identifying problems, risks, violation of rules, etc.) – one MFI created a « compliance team » focusing in

general on clients’ feedback (negative, but also positive)

Questions?

Еxperience to share?

Consult the SPTF Resource Center!

http://sptf.info/resources/resource-center

http://sptf.info/resources/resource-center

• Smart operation: see chapter on HR: Appropriate roles for 11 areas of microfinance operations.

• http://www.smartcampaign.org/tools-a-resources/796

• Videos – Auntie needs a loan: https://www.youtube.com/watch?v=k0uv7n591as – Ugafode: illustration of the benefits of SPM, for staff buy-in

• http://www.sptf.info/videos/financial-services-providers/208-ugandan-mfi- ugafode-puts-the-universal-standards-into-practice

• Imp-Act Guidance Note on Incentives: Integrating social performance into staff incentive systems

• Case studies: – VF Azercredit's Code of Ethics: Putting Values Into Practice – FinDev Azerbaijan: Retaining key staff through a “pay for performance”

culture – Muktinath Bikas Bank group (Nepal) training manual: Supporting informed

client decisions

Specific resources on HR

http://www.smartcampaign.org/tools-a-resources/796
http://www.sptf.info/videos/financial-services-providers/208-ugandan-mfi-ugafode-puts-the-universal-standards-into-practice
http://sptf.info/images/rc 5a vf azercredits code of ethics putting values into practice case study.pdf
http://sptf.info/images/findev_sp_fund_eng_0.pdf
http://www.mfc.org.pl/sites/mfc.org.pl/files/SP_Fund_Muktinath_Eng.pdf

Specific resources for Internal Audit/Internal control

Universal Standards Implementation guide

http://sptf.info/spmstandards/universal-standards

Smart operation: see chapter on Operations: Appropriate roles for 11 areas of microfinance operations.

http://www.smartcampaign.org/tools-a-resources/796

Smart Note: Facing Over-indebtedness at Partner Microcredit Foundation http://smartcampaign.org/storage/documents/Tools_and_Resources/Over- indebtedness_Partner.pdf

Imp-Act Guidance Note: Internal controls and audit: Integrating SPM into microfinance capacity building http://sptf.info/images/internal_control_guidance_note.pdf

http://sptf.info/spmstandards/universal-standards
http://www.smartcampaign.org/tools-a-resources/796
http://smartcampaign.org/storage/documents/Tools_and_Resources/Over-indebtedness_Partner.pdf
http://sptf.info/images/internal_control_guidance_note.pdf

Where to find SPI4 and related resources? www.cerise-spi4.org

http://www.cerise-spi4.org/

Thank you!

Contact MFC:

Kinga Dabrowska: kdabrowska@mfc.org.pl

www.mfc.org.pl

mailto:kdabrowska@mfc.org.pl
http://www.mfc.org.pl/

Post date

29 November 2017

Browse & learn more about

Webinars

One of the many functions of the European Microfinance Network (EMN) is to organise debates and webinars addressing a wide range of subjects pertinent to microfinance in Europe. These activities are a chance to foster an exchange of ideas among different partners, and contribute to spreading knowledge of microfinance throughout Europe.
Or discover what else we do

See also