Managing client outcomes (Part II)

  • Christophe BOCHATAY, Triple Jump
  • Thelma BRENES & Laura GÄRTNER, Oikocredit
  • Stéphanie GARCIA VAN GOOL & Rodrigo PELAEZ, Fundación Microfinanzas BBVA


Laura GÄRTNER noted that Oikocredit believes that better data leads to better decisions. Oikocredit’s client outcomes programme is based on two pillars. The first is by building financial service providers’ (FSPs’) capacity to measure and monitor client data, and the second, by conducting research at Oikocredit to better understand the impact on clients’ lives. Oikocredit is working with MFIs that ideally have a minimum of two-year panel data on a representative sample of their clients. It is also important that the MFI is willing to devote staff’s time on data monitoring and analysis training. Oikocredit is providing participatory one-week workshops to build MFI’s capacity on data analysis. At the end of the workshop the MFI makes an action plan and interactive dashboard based on the data analysis. The dashboard is integrated in reporting and presented to the board and senior management. The goal is to enhance data-driven decision-making within the MFI. 

Internally Oikocredit is doing econometric analysis in collaboration with the International Institute for Social Studies (ISS) at Erasmus University Rotterdam. Thelma BRENES discussed the econometric methodology and selected results of the discussion paper: ‘Do rural microcredit borrowers fare better in reducing poverty than urban borrowers?’. Oikocredit wanted to test whether rural borrowers are poorer than those living in urban areas and whether by focusing in rural areas their loans would have a bigger effect. They tested this hypothesis with the use of data from 187,988 borrowers from Philippines and India, spanning more than four years. They used the Progress out of Poverty Index (PPI) as a poverty measurement. Their econometric methodology was propensity score matching using nearest neighbour matching and fixed effects (FE) regression. The research showed that rural borrowers are indeed poorer those living in urban areas, and that rural borrowers experienced stronger poverty reduction over time than their urban counterparts, leading to a narrowing of the rural-urban poverty gap. In fact, the annual rate of change of rural borrowers was 0.5 to 4 points higher than that of urban borrowers. They also found that the urban-rural poverty gap shrank from 7.6 in 2010, to 6.2 in 2014. However, the difference remained significant. According to these results, Brenes argued that targeting rural people is an effective strategy for MFIs seeking higher social returns on their investments. For Oikocredit, that means that rural focus will be maintained and perhaps even strengthened to further reduce poverty in rural areas.


Stéphanie GARCIA VAN GOOL from BBVA Microfinance Foundation (BBVAMF) discussed the results of the Social Performance Report 2015. BBVAMF acknowledges that besides measuring social performance, it also needs to improve results for clients. Social performance management (SPM) is a tool to ensure their mission is integrated into day-to-day business management. She then continued by illustrating how BBVAMF Group (BBVAMFG) is monitoring its client vulnerability over time. As of December 2015, 61% of the clients were women, 47% of the adult clients had at best primary education, 30% lived in rural areas, and 20% were below 30 years old. 57% of BBVAMF’s clients are involved in small scale trade. BBVAMFG institutions succeeded in enrolling over 314,000 new clients in 2015 and retained the focus on low income entrepreneurs; as 87% of these are vulnerable. After two years, 32% of clients classified as poor or extremely poor generated net margins above the poverty line of their respective countries. Micro-enterprises grew 30% in assets, 16% in sales and 16% in net income. Moreover, 55% of BBVAMFG’s clients generated 119,214 additional jobs having a positive external impact on local communities. BBVAMFG is offering a diverse range of products. According to pilot studies, client retention is higher for clients holding a combination of savings and credit products. More specifically, for one of the MFIs in the Group, 73% credit clients remain with the MFI after one year, while 91% credit and savings clients remain with the MFIs after one year. 

Rodrigo PELAEZ talked about the importance of impact assessment and outcomes measurement within BBVAMFG. According to Peláez, impact assessment and outcome measurement helps them build tools which allow MFIs to create a comprehensive understanding of clients segments, and use the information to build more responsive products, channels and collaboration. Reports are generated quarterly and presented to each MFI’s steering committee and board of directors. He emphasised it is important to act on the knowledge provided by the data, to set incentives based on social performance indicators and improve the products and services based on the social performance knowledge. 


Triple Jump is responsible for managing part of the Dutch Good Growth Fund (DGGF) which provides financing for local small-medium enterprises (SMEs) in 69 selected countries through investing in intermediary funds and financial service providers. The DGGF is provided by the Dutch Ministry of Foreign Affairs. The fund’s outcome objectives are focused on revenue growth and job creation with a particular focus on the target groups of women, youth, and fragile states. Right from the start of the mandate, the Dutch Ministry of Foreign Affairs has made it part of the funds objective to be able to collect and report detailed outcome information and analysis. According to BOCHATAY, Triple Jump has built an active four-step approach to outcome management by setting outcome targets at fund level, integrating outcomes assessment into investment selection, collecting outcome results from investees, and monitoring and reporting outcomes at the fund level.

Bochatay explained briefly Triple Jump’s approach. While setting outcome targets at fund level, Triple Jump had to define the key indicators in collaboration with the Ministry. Those are: outreach, developmental relevance, additionality (to what extent the financial intermediaries are funding those in need), catalysing effect, and revolving character. They segment all investments made into categories with similar characteristics in terms of risk, return, and impact. Then, they make assumptions and set targets for a typical investment in each segment to figure out contribution to targets. The second step is to integrate outcomes assessment into investment selection. During this phase, the expected outcome of each potential investment can be compared to its segment benchmark to inform investment decision and portfolio construction. 

After the investment is made, Triple Jump collects the outcome data and produces an annual report on the investee level to evaluate how they evolve. They are currently in the process of developing a more sophisticated reporting system. Bochatay addressed some of the challenges in this step. In some cases, the financial intermediary and the investor have different missions. There is a need to incentivise the financial intermediary to track and report different indicators that serve their mission. Moreover, in the case of financial service providers there are often too many investees to be able to report at investee level. The use of representative samples is important. Last, revenues and profit are usually calculated only at credit appraisals and renewals but not during the course of the loans. Sometimes, there is a need to provide technical assistance. The last phase is to monitor and report outcomes at the fund level. In this step, Triple Jump adds the outcome results of individual investments to see how each one contributes to the total results, and compares results against targets to understand if and where the fund is underperforming.