UNDERSTANDING THE VALUE OF SPM in SEF, South Africa
The Small Enterprise Foundation (SEF) presents a unique opportunity for an insight into the value of social performance management (SPM).
SEF has two distinct microfinance programmes: MCP, which uses a general
approach, and the TCP, where rigid poverty targeting and impact monitoring
are applied. Given this, comparisons between the two will highlight the
underlying value of applying a social lens to performance management systems.
An initial analysis was conducted to compare the costs and revenues per
client at TCP and MCP branches of similar size and age. Based on data
from six TCP and six MCP branches, two key trends can be seen:
- The average branch cost per client in both clients is virtually equal
(55-56 Rand), even though the TCP absorbs the additional cost of loan
officer time to perform PWR and impact assessment, as well as branch
manager time to oversee the process. Indeed, the average cost per borrower
is slightly lower at TCP branches. This trend could be explained by
the higher retention rate enjoyed by TCP branches, as well as lower
delinquency rates - which result in higher loan officer productivity.
- Average revenue per client comparisons between TCP and MCP branches
reveals a significant difference: 145 Rand for the former, and 167 Rand
for the latter. This gap could be attributed to the difference in average
loan sizes between branches. In this case, it should be seen as the
opportunity cost to SEF of serving poorer clients.
Source: Soundbites - Imp-Act Consortium