The Social Performance Task Force (SPTF), a non-profit industry body with more than 3000 member organizations from the inclusive financial services industry. The SPTF develops and promotes standards and good practices for social performance management (SPM) : the systems that organizations use to achieve their stated social goals and put customers at the center of strategy and operations.
What is the Social Performance Task Force (SPTF) and how did it come about ?
It’s a global platform to promote and support a financial services industry that serves the interests of clients, institutions, and investors alike.
We began by having the conversation about what balanced, client-focused finance looks like in theory. Once we’d done this, we worked with partners such as ECLOF to see what it looks like in practice. In 2014, this multi-year, cross-industry development process culminated in the launch of the Universal Standards for Social Performance Management, and the subsequent update in 2016. We like to think of the Universal Standards as a comprehensive manual of best practices to help financial service providers (FSPs) put clients at the center of all strategic and operational decisions, and align their policies and procedures with responsible business practices.
Why is SPM important in microfinance and the overall access to finance sector ?
The Universal Standards underpin all the management, reporting, auditing, due diligence and rating frameworks used by different actors across the industry. What this means is that everyone along the financial services value chain is reading from the same page when it comes to social performance management. This is critical, because taking a value chain approach to SPM integration is the only way to ensure that it becomes standard business practice.
How do you view ECLOF as a socially responsible network, its activities and progress so far, and what still needs to happen ?
With its clear social focus and commitment to tackling poverty by equipping people with the necessary tools — financial and non-financial — the ECLOF network is a natural ally to the Task Force. SPTF stresses ‘improvement’ of SPM practice overtime as a key objective for partners in the field. We see ECLOF as a partner who shares this objective of improving practice overtime. ECLOF has made a commitment to working with its members to identify what their current state of practice is, and then help them improve. We are delighted by ECLOF’s marked progress implementing strong social performance and by its commitment to transparency, to sharing learning within its network and also with others in the industry. By using the SPI4 tool to conduct analysis on its network members, and then submitting this information to CERISE for benchmarking purposes — this benefits not only ECLOF and its clients but the broader industry. We are conscious, though, that all this work doesn’t come for free. It requires resources — and ECLOF needs to make sure they can access and retain these resources.
Please give readers an outlook on what’s coming in SPM in the foreseeable future.
Our work isn’t just about getting everyone on board the SPM train. We also want to link better management with better results for clients. For this reason, we’re particularly excited about the work of our Outcomes Working Group. A precise definition and measure of “social impact” has long eluded industry experts; historically, impact was assumed, so long as clients demanded and repaid their loans. More recently, randomized control trials have taken up the baton on the impact question, with one high-profile review concluding that the impact of microfinance is, on balance, zero. However, when it comes to the business of creating social value, we increasingly recognize that markets, clients, and institutions are rarely so straightforward, and immense variations in product design, delivery quality, and client uptake are always masked by academic averages. For this reason, we’re starting a data-driven conversation around the small, tangible, measurable outcomes (like increased business income) that will lead to bigger, longer-term impacts (such as moving out of poverty)—and finding out how better SPM practice can drive these positive outcomes.
Finally, we’re trying to expand the conversation around how to create a balanced business model to achieve impact. We recognize that the conversations we (as a microfinance industry) were having ten years ago are the same ones that impact investors and social entrepreneurs are having today. That means that we can be a rich source of insights, as other industries tread the same road towards definitions and frameworks around social performance. In terms of impact investors, this means engaging both the fund managers and asset owners, many of whom believe the common myth that financial inclusion automatically benefits clients. We hope to help fast-track the work of investors in defining, measuring, and improving their impact, e.g. through SPI4-ALINUS, a monitoring and evaluation tool for investors to use in their social due diligence and monitoring of FSPs. Importantly, we’ve also worked to harmonize our work with similar efforts in the broader impact investment sector–most notably by increasing alignment between the SPI4 and the B Impact Assessment and the IRIS (GIIN) catalogue of metrics.