2010 Microfinance Social Investor Meeting
July 13, 2010
On June 29, 2010, CGAP and the Investor Group of the Social Performance Task Force organized the Microfinance Social Investor Meeting. More than 40 investors gathered, including many microfinance investment intermediaries (MIIs), banks, a pension fund and several development finance institutions. Together they represented more than half of assets under management in the microfinance sector.
The meeting built upon the results of two previous CGAP Investor Roundtables held in Paris
(2008) and Madrid (2009) and the results of the investor working group to advance
transparency on environmental, social, and governance (ESG) performance.
This year the group looked at microfinance investment in the context of the impact investment movement and global trends in socially responsible investing (SRI), with an opening presentation by Mark Campanale on the relative lack of focus on social enterprise within the SRI sector, and the concept of a social stock exchange. CGAP presented the ESG data collected from MIIs in its annual survey. The discussion highlighted the differences in expectations and risk-return profiles among investors. Analysis of investor-reported data brought into focus the importance of improving quality and validation of information submitted by microfinance investees as well. The group also discussed the early experiences in rating MIVs.
A second focus of the meeting was investor responsibility in driving the implementation of the client protection principles in microfinance (a critical dimension of social performance) and broader concepts of investor responsibility. This included unveiling a draft version of the updated Investor Guide for implementing client protection (with a built-in due diligence checklist) and a spirited discussion of investor roles in preventing and addressing overindebtedness in selected markets, including thorough collective action.
As a conclusion of this year‘s meeting the Investor Group and CGAP have agreed to:
- Clarify goals, expectations, and social performance metrics of the microfinance
investment intermediaries.
- Share knowledge on investor tools and reporting templates of investees‘ social
performance.
- Explore how investors can tackle over-indebtedness by sharing country and MFI-level
analysis of the MFI market and coordinating investor responses, beginning with a
- Latin American country pilot.
- Comment on draft Investors‘ Principles (that go beyond client protection to articulate
broader responsibilities of investors in microfinance) and working towards their
eventual endorsement across the investor community and implementation.
The Investor Group also formulated recommendations to the broader Social Performance Task Force (SPTF) to focus on standards of reporting, clarify SPM tools available, continue to make the business case for SPM, and improve communication efforts.
Read more about the meeting in the summary report.
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