The Second Bottom Line and BRAC Uganda’s Gold

28 October 2011 at 00:45 6 comments

by Andrew Huelsenbeck, K16 Kiva Fellow, BRAC Uganda

The Second Bottom Line

One thing that’s gotten very popular with microfinance institutions (MFIs) lately is measuring success based on what is called a double bottom line. For a long time, the only bottom line for many MFIs was financials, but industry experts began to realize that looking good on paper did not amount to having any real social impact. This is why some MFIs have begun to use a second bottom line – social performance – as an additional metric for success.

What is social performance exactly? It is how an MFI is translating its core mission into practice. The success of this can be gauged in basically two ways: (1) by examining the actual impact of services on clients and (2) by examining the systems an MFI is using to optimize its impact on clients.

Among MFIs, a very common means of measuring the social impact of services is the Grameen Foundation’s Progress out of Poverty Index (PPI). The way the PPI works is by measuring the poverty levels of groups and individuals based on certain country-specific criteria like access to water, medicine, shelter etc. By examining changes in the PPI over time, MFIs are able to better determine their clients’ needs, which programs are most effective, how quickly clients leave poverty, and what helps them to move out of poverty faster.

The other main way of assessing social performance focuses less on the actual impact of services and more on MFIs’ management of the systems that optimize impact. This kind of management is commonly called social performance management (SPM). The success of SPM is based on an MFI’s ability to do mainly three things: (1) set clear social objectives, (2) monitor the progress towards achieving those objectives, and (3) use the insights from monitoring to improve overall performance and impact.

One of the major organizations responsible for establishing assessments and best practice guidelines relating to how MFIs achieve these three things is called the Social Performance Task Force (SPTF). The SPTF was birthed in 2005 when the CGAP, the Argidius Foundation and the Ford Foundation brought together leaders from various social performance initiatives in the microfinance industry to come to a consensus on a common social performance framework and an action plan to implement it. The SPTF has worked very closely with CERISE (the creator of the social performance assessment tool Kiva uses for its partners), and has recently been doing a lot of work in Uganda.

BRAC Uganda’s Gold SPM Award

Many Ugandan MFIs are part of a larger organization called the Association of Microfinance Institutions of Uganda (AMFIU). In the past year or so, AMFIU has begun to seriously encourage social performance management among its constituents. With the guidance of the SPTF and with funding from the Ford Foundation, the organization has held training sessions, published instructional guides, and not too long ago, held its first ever Social Performance Management Awards here in Kampala.

The event was huge. All of the big players were there: PRIDE, Opportunity, Finance Trust, Habitat for Humanity, EMESCO and more. The Ugandan Commissioner of Microfinance and the president of AMFIU were also in attendance and helped to present the awards to the MFIs that have really excelled in SPM. Many bronzes and silvers were handed out, but BRAC Uganda, the main MFI I am working with, took home the only gold.

BRAC Uganda Social Performance Gold

Mr. Ariful Islam, the (former) Country Representative of BRAC Uganda, displays BRAC's Gold SPM Award

BRAC Uganda is an incredible organization. In just six years, with the help of the MasterCard Foundation, Kiva, Unicef and other major partners, BRAC has become a microfinance titan in Uganda. It currently has over 1,800 employees working at 114 branches, has dispersed more than $71 million in loans, and has touched the lives of nearly 2 million of Uganda’s poor.

What’s more impressive, though, is BRAC’s dedication to the second bottom line. Its mission is clear and simple: to alleviate poverty by empowering the poor to bring about change in their own lives. BRAC has achieved this not only by bringing financial services to some of the remotest regions in Uganda, but also by starting and scaling up health, agriculture, education and adolescent empowerment programs.

Many systems at BRAC are set up to ensure that clients are actually benefiting from these programs. More than half of the time, program managers are out in the field interacting with clients; the 15-member Monitoring Department continually evaluates programs to prevent mismanagement and misappropriation of funds; and BRAC Uganda’s unique Research and Evaluation Unit regularly conducts studies on the relevance and effectiveness of BRAC’s operations.

The research unit at BRAC Uganda is also currently working with AMFIU and the Grameen Foundation to promote the use of the PPI among other major MFIs in Uganda. The poverty index (or scorecard) was originally developed by a lead BRAC International researcher using national household survey data in Uganda. The Grameen Foundation adopted the idea, and worked with BRAC to update the index using newer data from many different countries. Now, the two organizations are using the PPI to improve social performance in Uganda and all over the world.

Andrew Huelsenbeck is a Kiva Fellow currently working in Kampala with BRAC Uganda. To learn more about BRAC, please visit their Kiva Partner Page. If you are interested in helping to empower one or more of BRAC’s many wonderful entrepreneurs, you can join the Friends of BRAC Uganda lending team or check out new BRAC Uganda loans on Kiva.org. Happy lending!

Entry filed under: Africa, BRAC Uganda, KF16 (Kiva Fellows 16th Class), KF16 (Kiva Fellows 16th Class), Kiva Field Partners, Uganda. Tags: , , , , , , , , , , , , , , , , , .

This Is Urban Poverty in Tajikistan Mysteries, Geoglyphs + too-good-to-be-true Kiva Borrowers

6 Comments

  • 1. Linda  |  21 November 2011 at 14:25

    Andrew,

    If you could provide some video footage or stories from one of BRAC Uganda’s ELA clubs I would be absolutely ecstatic and eternally grateful! Thanks to your reassuring words over on Kiva Friends a few months back, I have started lending to these young ladies again and, I have to say, they are still my very favorite borrowers to lend to. In fact, I set up the ‘Younger Borrowers’ lending team on Kiva back in June in their honor and, between our 25 team members, we have made 430 loans to younger Kiva borrowers (at least 10 of whom are BRAC Uganda borrowers).

    I hope you enjoy the rest of your stay in Kampala and look forward to some ELA reporting with baited breath :-)

    All the very best,
    Linda (aka FoxyOxy)

  • [...] The Second Bottom Line and BRAC Uganda’s Gold Country: Uganda / Fellow: Andrew Huelsenbeck (KF16) Andrew takes a look at BRAC Uganda’s dedication to social performance. [...]

  • [...] TimeDifferent Exercises To Get A Flat Abdomencorel draw training video tutorials: keyboard shortcutsThe Second Bottom Line and BRAC Uganda’s Gold var topsy_style = 'big'; var topsy_nick = ''; var topsy_order = 'count,badge,retweet'; var [...]

  • 4. Antoine S. Terjanian  |  28 October 2011 at 03:39

    Dear Andrew:
    Thank you for your immediate, precise and direct response to the issue I raised.
    We are on the same wavelength and I am looking forward to learn from your experiences in the field. I will stay tuned, but I would like to ask you a favour: Just in case I am busy and miss your next post, would you kindly send it (or a link) to me directly aterjanian (at) yahoo.com
    Best wishes for a successful mission

  • 5. Antoine S. Terjanian  |  28 October 2011 at 02:07

    Mr. Huelsenbeck:
    I am impressed by your excellent write-up and the clear references and weblinks for more precise definition of things like the Progress out of Poverty Index (PPI) (I did not see a link for “social performance management (SPM)”) .
    I consider myself a “Sustainable Development” expert, and while I appreciate your elegant text, I was hoping that you would give us tangible personal observations in the field of what actual real “Impact” has BRAC had that earned them this “gold medal award”. What did YOU actually see that is worthy of such praise.
    Frankly, the “brueaucratese” used by the “development industry”, which keeps developing new indices and performance measurements, is stale language for me, unless eager people like yourself can bring it to life with unbiased personal testimonies from the field.

    • 6. ahuelsen  |  28 October 2011 at 02:58

      Antoine,

      Thanks for reading and thanks for this great response. I agree with you: the language of the industry is stale. But I also find it rather confusing. With this post, I was trying to introduce some standard language and key players, and to give a brief recap of the award ceremony and why BRAC did so well. In one of my next posts, I want to include some video footage and some stories from at least one of BRAC’s amazing Empowerment and Livelihood for Adolescence (ELA) clubs. This will give a much clearer picture of how BRAC is impacting the lives of its clients. Thanks again, and stay tuned (or more appropriately, linked)!

      All the best,

      Andrew


Get Involved!

Learn more about this blog and about Kiva Fellows

Visit Kiva.org

Apply to be a Kiva Fellow

Enter your email address to receive notifications of new posts by email.

Join 1,337 other followers

Archives

Drawing from the Field

Kiva Blog Policy


Follow

Get every new post delivered to your Inbox.

Join 1,337 other followers

%d bloggers like this: