Strengthening responsible inclusive finance practices and building capacity in Central America & Caribbean by leveraging SPTF’s global work


Application of the Universal Standards for Social Performance Management (USSPM) by inclusive financial service providers can ensure that low-income and vulnerable people will improve their livelihoods as a result of client-centric financial services offered responsibly. The Social Performance Task Force is best positioned to promote the application of the USSPM globally - and with REDCAMIF in Central America & Caribbean - as effective market transparency and self-regulation tool for the global inclusive financial inclusion industry.

Country/region Topic Period Budget
Central America
Global
Employment & economic development
Informal banking & insurance
01.11.2017 - 31.12.2021
CHF 1'965'000
Background

Driven by digital technologies, the financial inclusion eco-system is expanding rapidly with new market entrants offering financial services to low-income and vulnerable clients. The new entrants with social goals, but also the mature IFSPs, do not achieve their goals unless they are managing their social performance con-sistently and pro-actively regardless of how sincere their intentions and commitments are.

 

The latter is supported by statistical evidence of a positive correlation of social and financial performance. However, the practitioners require good tools and capacity building to integrate social performance management effectively into their changing business models. Such support can be best offered by the Social Performance Task Force (SPTF) in partnership with strong networks to deliver locally adapted solutions. 

REDCAMIF is well positioned to offer training and capacity building in social performance management as SPTF’s decentralised outreach to the Central American & Caribbean region.

Objectives The inclusive financial service providers (IFSPs) and their impact investors - globally and with a dedicated support in Central America & Caribbean (CAC) - are encouraged to, and supported in, applying the USSPM to ensure end-clients (notably low-income and vulnerable people) are at the centre of their strategy and operations. This will help IFSPs to achieve their financial and social goals and enable their end-clients to better manage their money and thus improve their livelihoods which would result in pro-poor employment and income generation.
Target groups
  • Low-income and vulnerable people as clients of IFSPs (demand side).
  • Inclusive Finance Service Providers (retail level).
  • Technical Assistance Providers in client-centered manage-ment practices related to the USSPM, Client Protection Principles, assessments, and ratings.
  • Local financial inclusion networks/associations (meso level).
  • Microfinance regulators (policy level).
  • Impact investors, funders, global networks (global level).
Medium-term outcomes
  1. The strengthened and regularly adapted Responsible Inclusive Finance InfraStructure (RIFIS) in line with the rapidly changing financial inclusion eco-system further enhances market transparency and self-regulation of an increasing number of IFSPs and their impact investors.
  2. More end-clients manage their money better as the result of a reinforced social mission of the financial inclusion industry triggered by (1) supporting IFSPs to put the USSPM into practice with the well-being and needs of their low-income clients at the centre of strategy and operations, and (2) generating reliable and transparent information on the financial and social performance of IFSPs and their impact investors.
  3. Strengthening social performance practices of IFSPs in CAC through training and capacity building through REDCAMIF, the regional microfinance association, as outreach of the SPTF in this SDC priority region.
  4. Highlighting learnings and innovation from CAC with the rest of the world, leveraging SPTF’s global platform of 3’000 plus members.
Results

Expected results:  

In Central America & Caribbean (CAC):

  • number of trainings funded
  • number of persons trained
  • number of projects implemented by IFSPs
  • number of new resources developed

For global inclusive finance industry:

  • number of innovations/learnings shared from CAC with rest of the world


Results from previous phases:  

  1. A responsible inclusive finance vision with the USSPM accepted by all stakeholder groups of the global inclusive finance industry.
  2. A set of social performance standards that IFSPs report to the Mix Market and Data Platform to enhance market transparency and accountability of their and their impact investors’ social mission.
  3. Clear social performance measurement and reporting through the Social Performance Indicator audit tool, social and microfinance institutional ratings, and the Smart client protection certification.
  4. Excellent information and technical tools for IFSPs and their impact investors to apply the USSPM.
  5. Strong advocacy role evidenced by the growing membership of SPTF with more than 3’000 members.


Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
  • Other international or foreign NGO North


Coordination with other projects and actors

This project leverages the structure of the Responsible Inclusive Finance Facility in SSA and Mena managed by SPTF with Smart Campaign (funded by AFD + EIB) and the work of leading RIFIS initiatives. 

Learnings and innovations will be shared with SPTF members and others (IFSPs, impact investors, funders, international and regional inclusive finance networks, information and capacity building organizations, etc.). 

Close synergies exist with SDC’s multi-Bi MIF/IDB project on corporate governance of IFSPs in Latin America and COOF Managua support to the Nicaraguan microfinance regulator on social performance management. 

Substantial synergies exist with CGAP that has initiated the RIFIS and SPTF since late 1990’s. Close co-ordination between Global Institutions and PF E+I will ensure that best practices in financial inclusion are better applied within SDC’s Global and Regional Cooperation Domains.

Budget Current phase Swiss budget CHF   1'965'000 Swiss disbursement to date CHF   1'250'000
Project phases Phase 1 01.11.2017 - 31.12.2021   (Current phase)