VF AzerCredit, as an MFI founded and initially capitalized by World Vision, keeps abided to the following its dual nature, which implicates pursuing both social and financial goals and performance at the same time.
The development of Social Performance Management (SMP) in VF AzerCredit passed through several stages – from getting acquainted with the idea and preparation phase to preparing necessary tools to implement the intended.
After joining the AMFA-initiated Working Group on SPM in 2006, VF AzerCredit’s management recognized the need to start developing a Social Performance Management system to balance its social and financial performance, and the organization started purposeful, organized activities to systemize its social commitment. As a result of the hard work done in the past few years the organization has been able to establish a robust SPM system. The system has gained wide recognition among international organizations and brought several awards to VF AzerCredit:
- MFC awarded acknowledgement for pioneering participation in the project Advancing Social Performance Management in Azerbaijan using the Quality Audit Tool (2009);
- MF Transparency recognized VFAC as a leader in transparent pricing in Azerbaijani microfinance industry (2009);
- CGAP, Michael & Susan Dell Foundation together with MIX awarded a Gold Award for Social Performance Reporting to MIX in May 26, 2010;
- Award "Member of the Year 2010" given by AMFA in October on the 5th Azerbaijan Microfinance Conference "Responsible Micro-Finance in Azerbaijan" and many others.
As the continuation of this recognition, VF AzerCredit was requested to share its experience with the participants of the Study Tour jointly arranged by MFC and AMFA for Russian and Central Asia micro-finance associations selected to receive grants from the Social Performance Start-up Fund.
In the current world many micro-finance organizations recognize that Social Performance Management and social feedback is a strong tool in helping organizations to uncover hidden talent, align goals rapidly, engage people and drive significantly better business outcome.
Thus, the initiative of setting up the Social Performance Start-up Fund for micro-finance organizations was a response to the need of scaling up SPM in the microfinance industry. The initiative aims at increasing transparency and implementation of the SPM processes and tools by microfinance institutions.
Within this initiative, on October 20, 2011, VF AzerCredit hosted a full day presentation on its SPM experience for the participants of the 8-day SPM Study Tour organized for such grantee organizations as AMFOK (Association of Microfinance Organizations of Kazakhstan), National Partnership of Russian Microfinance Sector’s Members (Russia), and Microfinance Associations of Tajikistan, Uzbekistan, and Kirgizstan.
The guests received ample information on the idea of SPM, the evolution of SPM in VF AzerCredit, and its constituents.
First of all, as a foreword, the guests were provided with background information on VF AzerCredit; its history, its achievements, target clientele, and its social goals and objectives. It was stressed that SPM also helps in analyzing performance against established goals and industry trends, identifying risks related to reputation, mission drift, and client protection, determining opportunities for further development, building industry reputation, and attracting investors. Thus, it was explained that Good Social Performance is a high priority for VF AzerCredit, mainly due to the organization’s vision and its origin, and the double bottom line concept of micro-finance.
Then the guests received information on the principles and components of the SPM in VF AzerCredit. The participants, who are expected to launch an SPM system at home, displayed a special interest in the technical aspects of the Social Performance Management System of VF AzerCredit.
Particularly, they leaned that the Social Data Tracking component comprising the in-house developed Poverty Scorecard makes the pivot of Social Performance Management system.
Also, the guests were explained how responsible financing is ensured through lending policies, client protection policy and indebtedness check via the Credit Bureau. It was informed that since 2008 various policies, procedures and internal controls have been developed to ensure social responsibility – to clients, staff, community, and environment, as well as a full compliance with the Organization's mission and best practice recommendations, including 7 Client Protection Principles of the SMART Campaign.
It was highlighted at the end that the SPM helps the organization to remain committed to its mission and significantly improve its effectiveness in reducing financial exclusion and poverty; ensures stronger client satisfaction, higher client retention, better portfolio quality and faster growth; enhances its reputation, competitiveness, sustainability, and capacity to innovate and diversify products and services; provides investors, stakeholders and the general public with reliable and regular information about its performance, which, in its turn, opens avenues for more funding sources; and ensures better working atmosphere and staff motivation.
All participants highlighted that the day in VF AzerCredit was very inspirational and content-reach due to open experience sharing and practical character of meetings with VF AzerCredit staff.