Frontier Social Investing Putting Impact First, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

1. Abu Dhabi, March 2016
Frontier Social Investing – Putting
Impact First

2. #18MCSummit
60COUNTRIES
3Bn DOLLARS
20Mio PEOPLE
SINCE2001

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“To foster inclusive growth and shared
prosperity by empowering low income individuals and
households across the emerging world.”
Our vision & mission

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• Individuals
• Solidarity Groups
• Micro- and Small
enterprises
Investors Microfinance Fund MFI Microentrepreneurs
The microfinance value chain: Connecting capital markets to Microfinance
$
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$
$
$
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$+%$+%$+%
Public
Investors
Private
Investors
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Public-Private partnerships to address different needs of clients
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Education FinanceAccess to Finance
Climate Insurance Agri Finance & Insurance

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How do we actually ensure that long-term needs of clients are met?
 Social performance is at the heart of BlueOrchard’s mission, vision and
culture incl. proprietary tools, staff training and active participation in industry-wide initiatives that
contribute to responsible microfinance
 Social Performance is an integrated part of the investment process, proprietary Social
Performance scorecard(SPIRIT 5.0)
 In our Financial Strength Analysis, we focus on long-term sustainability
(and Governance is key)
 We work hard on developing new (investment) products and services
that are more appropriate for the end clients, including technical assistance facilities

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Social Performance versus Social Impact
• Social performance looks at how the MFI operates in order to reach social objectives
• Social impact measures actual changes in clients’ lives
Intent
Internal
Systems &
Activities
Outputs Outcomes Impact
Mission
Social Goals
Governance
MFIs Social responsibility to
clients, staff, community and
environment
Breadth (# of clients), depth
(poverty segment targeted by
MFI) and diversity of services
Cost of services to clients
Staff training on Social
Performance, incentive
schemes on social
performance, turnover
Client protection practices
Client poverty assessment
and payment capacity
Measuring Client retention &
Client satisfaction
Geographical
outreach
Outreach to
women
Client outreach
Outreach of non-
financial services
Employment
Generation
Children in school
“Progress out of
poverty “
(Measures clients’
poverty level at
entry and after
3/5 years)
Poverty alleviation
Empowerment
SOCIAL PERFORMANCE SOCIAL IMPACT
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BlueOrchard’s internally developed social performance assessment tool, with top line categories
aligned to the Universal Standards of Social Performance Management; and a high degree of
alignment with SPI4 on individual indicators
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Define and Monitor
Social Goals
Ensure board,
management and
employee
committment to social
goals
Design products,
services, delivery
models /channels
that meet clients’
needs /preferences
Treat clients
responsibly
Treat employees
responsibly
Balance social and
financial
performance
Promote
environmental
protection
SPIRIT v 5.0
SPIRIT: Social Performance Impact Reporting & Intelligence Tool

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• In each of the top line categories, Investment Officers conduct an in-depth analysis of each
MFI’s policies, procedures and actual practices
• Ex. “Design products, services, delivery models and
channels that meet clients’ needs and preferences”
for example, we look at the following areas:
– To what extent does the MFI provide financial services beyond credit to address clients’
various needs, including voluntary savings, insurance, and payments & remittance
services?
– Does the MFI provide non-financial services, including financial literacy training, business
and skills training, linkages to markets, health and education services?
– Does the MFI actively and systematically seek client feedback to improve its products and
services to better meet client needs?
– What is the MFI’s client retention rate and are reasons for client exit systematically
investigated?
– Does the MFI lend to its clients in the currency in which they earn their income or does it
pass along foreign exchange risk?
SPIRIT: Social Performance Impact Reporting & Intelligence Tool (con’t)
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