What is SmartAid?

SmartAid - Working Smarter for Better Results
“How do you know a high-quality aid agency when you see one? Is it one that learns from past projects, or that rewards employees for a subtle blend of results and risk-taking? Measuring such characteristics is hard–especially when the agencies being measured fund your budget. But that is exactly what CGAP has done, in the realm of aid for microfinance, using extensive surveys and interviews.” – David Roodman, Center for Global Development

In 2006, the heads of 29 major development institutions endorsed the creation of an index that would measure and rate the way microfinance funders work. The SmartAid for Microfinance Index is CGAP’s effort to fulfill that commitment.

SmartAid measures whether funding agencies are set up to support microfinance effectively. Its premise is that organizations that have a clear strategy and staff with relevant expertise, are transparent and accountable, share knowledge, and use appropriate funding instruments are better equipped to support microfinance. As such, the Index focuses on what funders can influence most directly—their internal management systems.

For funders that join, SmartAid is….

A service. SmartAid is a service for funders that seek to better understand how internal management systems, policies, procedures, and incentives affect their work in microfinance. Participating institutions receive a score and a report that details strengths and weaknesses, highlights examples of good practice, and suggests improvements. Throughout the process, SmartAid includes opportunities for in-depth discussion and advisory services for technical staff and senior management.

A commitment to transparency and accountability. By participating in SmartAid, funders demonstrate a strong commitment to transparency and accountability. SmartAid is one concrete way for agencies to act on the pledge for more effective aid as spelled out in the Paris Declaration.

A tool to define comparative advantage and opportunities for collaboration. SmartAid helps funders understand where they stand relative to others. This provides ways to find synergies and opportunities for collaboration with other organizations – identifying areas of common interest and comparative advantage.

Though created specifically for microfinance, SmartAid’s focus on core management systems is relevant—and may indeed be applicable—to other sectors of development.

After the successful 2007 pilot round, 10 funders have participated in SmartAid 2009, the baseline year of the Index. Read more about the Index and its methodology including the 9 indicators. If you have any questions or comments, please contact the SmartAid Team.