1. Who defines the criteria for the Seal? How?
A: The Seal Steering Committee approves the final criteria for the Seal. However, it is based upon the advice of the Technical Committee, which consists of raters, researchers and others experienced with assessing the performance of MFIs. The Technical Committee defined and tested the indicators on which an MFI will be certified.
2. How will assessments be conducted? How will you do the assessments – outsource it? Hire a team of experts?
A: The specialized rating agencies conduct full assessments (likely as part of a standard social rating) and submit their recommendation to the Seal Steering Committee.
The Seal team is working with CERISE to create a tool for basic assessments and self-assessments. These will not result in Seal recognition, but provide progress data toward fulfillment of the indicators.
3. Who will check their implementation? How?
A: The Seal Steering Committee makes and endorses the final decision based on the recommendation of the specialized rating agencies. The Steering Committee is comprised of long-term experts representing a variety of stakeholders, including practitioners, investors, donors, and support organizations.
4. What’s in it for MFIs (costs and benefits)?
A: Seal assessments will be performed by the specialized rating agencies (likely during their standard social rating). The costs are still being finalized, but it is estimated that the assessment will only be an incremental cost beyond the social rating. The assessment involves interviews, review of documents, and field visits, and lasts approximately one week. Results of the assessment will be available one to two months after the assessment is performed.
The Seal recognizes the exemplary poverty work of an MFI and differentiates it from other microfinance providers. For those MFIs that are already achieving significant outreach and positive outcomes for people living in poverty, and are able to provide evidence of this, the Seal will highlight the institution to impact investors and donors who have the objective to support work that is meeting poverty reduction goals. As institutions apply for and are awarded the Seal, they become examples to others that will push deeper into areas of poverty to reach poorer populations and expand the benefits for their clients, as the market rewards the institution.
For MFIs that have a poverty reduction mission but would like to deepen their outreach and better measure client-level outcomes, the Seal will provide a community of practice in which emerging good practices can be shared, along with tools and other resources, to help achieve social mission.
5. How will the Seal enable a community of practice? Does this not overlap with SPTF? How do all the initiatives fit together? Will the reluctance on the part of MFIs/ MIVs to sign up for “another” initiative be a big obstacle? MFIs are saying there are too many initiatives out there and that, even when they invest money and resources and comply with investors’ SPM requirements, they don’t have anything to show for it. Some investors are reluctant to support certain initiatives because they already have established methodologies that they don’t want to change.
A: The Seal builds upon and reinforces the work of the Smart Campaign and the Social Performance Task Force, both which are represented on the Steering Committee. No MFI will be recognized by the Seal that has not yet met the minimum requirements from the Client Protection Principles and the Universal Standards for Social Performance Management.
The Seal focuses a lens of poverty on these initiatives and, by collecting and sharing rigorous, objective, and concrete evidence of success, reinvigorates the role of financial services as a powerful tool and platform in the fight against poverty.
The Seal represents the first major initiative to focus on client outcomes and is complementary to and creates a simple focal point for the efforts of Smart Campaign, SPTF, MIX Market, and others working on accountability in the industry.
6. How do you see the Seal as becoming something that will be applicable to other sectors beyond microfinance? It seems like the partnerships so far are with microfinance-focused initiatives (SPTF, MFTransparency, etc.)
A: While the Seal initiative was born out of the need for measuring poverty outreach and client-level outcomes in the microfinance industry, the methodology can be adapted in line with existing frameworks such as IRIS and GIIRS, the latter of which is represented on the Seal Steering Committee. A means to measure the effectiveness of social enterprises is important for all pro-poor initiatives. The Seal aims to expand the concept to include the broader eco-system of pro-poor work, including livelihoods, education, and corporations with customers living in poverty. It is expected that an appropriate technical committee will be formed to define these assessment indicators beyond microfinance.