While social
initiatives often come up with and nurture ideas with the potential to change
the world, a healthy business approach is required to unleash the full
potential of such ideas in the majority of cases. This also applies for
microfinance - the response to the demand for financial services of micro-enterprises
and poor households in developing and emerging countries, that otherwise would
have no or only limited access to the formal financial sector.
Recent
events in some of the most advanced markets for microfinance and the at times
concomitant controversial media coverage have regrettably tarnished the sector’s
reputation lately. They have thus drawn the attention not only of the
microfinance community, but also the broader public, to the risks involved in
this rapidly growing industry. These risks include increasing competition,
governance and regulatory issues such as overindebtedness of clients, bad
lending practices of the microfinance institutions and mission drift - to name
but a few. Stakeholders at all levels of the value chain, from investors to end
clients, are increasingly worried about the negative consequences of a
unilateral commercialization of microfinance in pursuit of financial
profitability.
The Social
Performance Task Force (SPTF), brought together in March 2005 by the
Consultative Group to Assist the Poor (CGAP), the Argidius Foundation and the
Ford Foundation, has taken on the challenge of addressing the issues the
microfinance sector is currently facing. Governed by a 16 member steering
committee with members from every region and a fixed number of elected
representatives from each of the major stakeholder categories, this
multi-stakeholder initiative (MSI) has been initiated to come to an agreement
on a common social performance framework and to develop an action plan to move
social performance in microfinance forward.
Remarkable from
a stakeholder-oriented perspective is the way in which SPTF attempts to reach
these objectives. By engaging with diverse microfinance stakeholders, the
initiative provides a platform for dialogue, learning and collaboration. Over
1,000 individual members, representing almost 600 different organizations,
currently discuss and decide on new resolutions and agreements in annual or
online conferences. Moreover, members of the task force are regularly being asked
for their opinion and active participation in the development of a social
performance framework and an action plan.
Such a deeply
embedded stakeholder governance-approach seems to be most efficient and fruitful
in a setting that is characterized by social objectives, global activities, and
institutional complexity like microfinance. However, the SPTF may also serve as
a positive example to learn from for the establishment of governance structures
for multinational corporations embedded in complex stakeholder networks.
Marc Moser
Links and references:
Social Performance Task Force (SPTF) - http://sptf.info/sp-task-force
Consultative Group to Assist the Poor (CGAP) - http://www.cgap.org/
Argidius Foundation - http://www.argidius.com/
Ford Foundation - http://www.fordfound.org/
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