Social Performance Task Force (SPTF)

Financial inclusion – if done responsibly – is a key enabler for reducing poverty by ensuring that individuals, households, and businesses have opportunities to access and the ability to use financial services (FSs) meeting their needs. While financial inclusion has expanded the last decade, 60% of adults and 70% of women in low income countries still do not have access to FSs.

The global context, with repeated crises of multiple natures, reinforces the importance of economic and financial resilience of the poor and marginalized populations, thus the relevance of further pursuing the promotion of financial inclusion. The increased role of poorly regulated new actors brought into the sector by digitalization and more profit-oriented sources of funding of microfinance institutions (MFIs) challenges the inclusiveness and the responsible business conduct of financial service providers. It is therefore utmost relevant that the clients’ needs are put at the centre, that the clients understand the terms and conditions of the financial products they purchase, and that their over-indebtedness is avoided.

Direct: financial service providers (FSPs); technical assistance providers in client-centric management practices relating to the Client Protection Standards, assessment and rating; local/regional financial inclusion networks/association; microfinance regulators; impact investors, funders, global networks

Indirect: low-income and vulnerable people (and households) as clients of FSPs

At global level:

1. Equipped and healthy FSPs demonstrate the social and financial value of client protection and social and environmental performance, with positive outcomes for customers, staff and the environment

2. The demonstration of the value of social and environmental performance is shared with and influences other providers and (impact) investors

3. The national regulatory environment for FSPs is improved and includes customer protection, encourages innovation and inclusion, and promotes growth for all

4. Other standard setters and policymakers include SPTF and Cerise’s work in their own strategies and impact management work

At regional level (Central America and the Caribbean):

5. The social performance of FSPs in Central America and the Caribbean (CAC) are strengthened through training and capacity building through Regional Inclusive Finance Facility (RIFF) co-managed with the Red Centroamericana y del Caribe de Microfinanzas (REDCAMIF), the regional microfinance association

6. Learnings and innovation from CAC are widely shared leveraging SPTF’s global platform

Expected results:  

• Continuous review and update of the Universal Standards to reflect trends and reality of the market; special emphasis on the gender lens and digitalization of financial services and products
• Upgrading of the Social Performance Indicator (SPI) to SPI5 allowing the FSPs to assess their SEPM and bringing the SPI online
• 300 FSPs listed as ‘committed to implement’ and 100 FSPs listed as ‘certified’ within the Client Protection Pathway
• Upgrading the online knowledge and resource centre accessible in 3 to 4 languages
• Development of 4 new e-learning courses and realization of 4 regional / global events per year
• 60% membership increase up to 7’500
• Formal interaction with min. 10 international standard setters to influence more responsible and inclusive practices on markets; min. 3 national regulators adopt client protection standards
• RIFF_CAC: support to min. 25 institutions to upgrade their SEPM practices

Results from previous phases:  

• 530 financial service providers (FSPs) have applied the unviversal social and environmental performance management (SEPM) standards managed by SPTF (doubling their number); qualified auditors increased from 104 to 214; and the number of investors using the investor due diligence tool tripled from 13 to 40
• SPTF+CERISE have taken over the Smart Campaign (incentivizing the adoption of responsible practices and customer protection of low income customers) transforming it into the Client Protection Pathway (a universal label certifying the client protection systems of FSPs)
• The Resource Center curated an online library of over 550 resources (guidelines, tools, templates, case studies) relating to all dimensions of SEPM
• The governments of Nicaragua and the Philippines have incorporated the Universal Standards into their regulations and supervision of microfinance institutions

Consultative Group to Assist the Poor (CGAP)

Swiss Capacity Building Facility (the Client Protection Pathway status of FSPs is one mandatory criteria for SCBF grants)

Various SDC financial sector development / financial inclusion projects in priority countries