From good intentions to a sustainable future
Oikocredit is not simply committed to delivering microfinance to clients in developing regions, it is also dedicated to ensuring that its clients have a sustainable future. Our capacity building programme focused on client outcomes is key to achieving this aim.
As previous reports on the development of this element of Oikocredit’s work have stated, capacity building through the collection and analysis of data is vital for delivering on good intentions and building a strong foundation for the development of sustainable organizations. The client outcomes programme helps Oikocredit’s microfinance partners understand what does and doesn’t work for their clients, and to identify where improvements are needed.
Building the network
The client outcomes programme started in 2014 with 11 microfinance institution (MFI) partners and a target of 50 partners by 2020. As of 2016, it has 14 MFI partners, including partners new to the programme in India, the Philippines and Nicaragua. Each time a new partner joins the programme, the social performance and capacity building (SPCB) department starts afresh to understand the specific nature of the poverty levels faced by the clients of each of these partners.
As part of this learning process, Oikocredit staff provide essential training to these MFIs, helping them understand the information contained in the data they collect. Training MFIs in how to collect the data and analyse it more effectively leads to new insights, and it also provides Oikocredit’s SPCB department with critical information about the differences and similarities between partners and regions.
Data differences and similarities
A comparison of data collected in India and in Nicaragua provides an example of the task facing the client outcomes team. Although the client outcome programmes team only works with one partner in Latin America to date — Fundenuse in Nicaragua — the analysts noticed a disparity in the data sample sizes gathered by Fundenuse and partners in India, with the latter having a greater amount of client information. This is due to the fact that India has a greater population density and its MFIs work with larger numbers of clients. Indian MFIs collect progress out of poverty index (PPI) data for every client, whereas in Latin America a client sample is selected for PPI. However, as this difference is based on a single partnership in Latin America, this view may change as other partners are added.
By contrast, the SPCB team discovered an interesting similarity in the way MFI partners on these two continents define a household and number of members in a household when it contains multiple families living together. Thelma Brenes Muñoz, a social performance analyst on the client outcomes team, explained that in both Nicaragua and India, the number of people who eat in a kitchen, or the number of kitchens within a house, is the defining measurement.
The programme’s future goals
One of the client outcomes programme’s key goals is to expand the number of partners engaged in the programme. The team hopes to add MFIs in Bolivia, Peru and El Salvador in the near future to expand this data-based capacity building in Latin America while continuing working also with partners in Asia.
However, the programme also has other pressing needs in addition to building the network. Data collection and analysis is a specialist task and the SPCB team is seeking more trainers with the specific skill sets to perform the job. They are looking for people who are based in the regions participating in the programme, who already have a sound knowledge of, and who are excited by, data analysis. The ambition is to develop these local based consultants as trainers for the client outcomes programme.
The client outcomes programme selects MFIs with a robust management information system (or MIS) that provides unified data storage. Currently, the team find that some of Oikocredit’s clients have information software that doesn’t store the collected data in a way that can be easily accessed or analysed, and sometimes even restricts storage of historical data.
Alongside Oikocredit’s other capacity building programmes, which focus on agriculture and financial services, the client outcomes programme is central to Oikocredit’s commitment to ‘finance plus’ — offering partners more than just financing.