Joana AFONSO of e-MFP opened the session and explained that for this year’s edition of EMW high interest was expressed for the topic of Impact & Outcomes Measurement. This follows many years of work in this field at sector level (largely led by SPTF), as well as the overall development of the impact investment sector, and the need under the current Covid situation to measure its impact by e-MFP members. ‘Where do we stand and what is the future of Outcomes measurement’ was the focus of this session.
The first question to reflect on by Amelia GREENBERG of SPTF was ‘What is outcomes management and how does it relate to the Universal Standards for Social and Environmental Performance Management’. Outcomes are the (positive/negative) changes that clients experience when using financial services and products. Impact requires proving causality and to find this evidence is difficult and costly. Outcomes have a plausible correlation with your intervention but do not attempt to prove causality, and action and monitoring can take place on an ongoing basis. Concerning the Universal Standards, a manual of management practices has been created by and for FSP’s.
The following key changes are noticeable in the recent update:
On the question whether there is a business case for outcomes management Greenberg responded with ‘yes and no’. If you collect the right data regarding more immediate term outcome impact which the FSP can control, there is a business case. The FSP can learn from this and improve its interventions and services accordingly. For longer-term outcomes (e.g. poverty alleviation), it is harder to make the business case because many other factors are of influence. An example of where there is a business case: a client reports that the finance she received from the FSP intended to invest in her small business had been used for immediate healthcare costs. This information is useful for the FSP to understand the actual needs of its client, in this case access to healthcare finance or the availability of preventive services as an FSP. Another example related to a negative outcome related to child labour; a client had to keep her child at home supporting her with repaying a loan. The FSP can learn from this case how it could support its client better, perhaps by rescheduling the loan, and allow her keep her child at school.
The main challenges for collecting outcome data according to Greenberg are the resources needed (budget/time) and the capacities available. At the same time there are several solutions, for example by using a smaller sample size group, and embedding the outcome management actions as much as possible within existing processes of the organisation.
Greenberg closed the session by sharing the take-aways that outcomes management is relevant for FSPs to understand the client better, to segment the information collected, and to embed it as much as possible in your organisation to improve your product/service.