Tamweelcom Social Audit Report by Mtri58q


“Sanabel Micro-Finance Network “

Prepared By: Social Audit Team

Social Audit Report Summary


In recent period the attention of microfinance industry to the improvement and maximizing
of the MFIs social performance has been significantly increasing. Hence, through a number
of global and local initiatives, new tools and solutions, focused at helping microfinance
organizations to become more successful in the management of their social performance,
have been developed.

Social Audit (Quality Assessment Tool) has been brought into the region through a joint
initiative of SANABEL and the Microfinance Centre for CEE and NIS (Warsaw, Poland)
supported by Oxfam/Novib. This is a second practical solution (after training on Social
Performance Management) that has been made available to MFIs in MENA region.

While there are efforts to equip MFIs with an ability to report and benchmark their social
performance (notably MIX Social Performance Indicators reporting initiative), QAT looks
inside the institution to evaluate the effectiveness of internal systems, their support for the
achievement of social goals. Hence, the tool’s and the social audit report applicability is
more internal, providing an MFI with an understanding of the strengths of its internal
systems and processes in their support for SP, as well as putting light on the areas for

This report was prepared by a team of SANABEL trainee SA facilitators in the process of their
practical training conducted by two MFC master facilitators.

The Process of Audit and Structure of the Report

In the process of social audit implementation, the team reviewed relevant internal
documents, conducted a series of interviews with key managers of Tamweelcom, as well as
focus group discussions with Loan Officers, and clients. Based on information collected, an
internal systems review report was prepared, which is organized around three broad

Dimension 1 – Intend and Design, that seeks to understand to what extend does an MFI
have a clear social objectives and systems in place that are likely to lead to their

Dimension 2 – Does the MFI have relevant, reliable, and consistent information on the
extent it is achieving its social goals? How do available information systems support social
performance management?

Dimension 3 - To what extent does an MFI have effective management systems for the
improvement and management of its social performance? How effective is decision making?
How internal systems are aligned around social performance?

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Analysis of these three dimensions is presented in the form of highlighted strengths and
areas for improvement. Since the purpose of the social audit is to provide the management
with information for further decision making and implementation, ideas and issues
discussed during the panel presentation of the report has been also incorporated in the final
version. Both strengths, areas for improvement and ideas for actions are quite detailed and
organized around three dimensions mentioned above. The following could be cited as key
strengths, areas for improvement, and agreed approaches how to further improve the social
performance management systems of Tamweelcom.

Key strengths:

    -   There is a strong dedication of the Board, the management, and staff to the social
        mission of the organization. Broad social goals are well understood and supported
        across the organization

    -   The organizations socially responsibly towards its clients, staff, and communities

    -   The broad range of products currently offered by the organization meets key needs
        of clients

    -   Available MIS, together with high staff skills allow it to support comprehensive social
        performance management system

    -   Available staff competencies and experience ensure high quality of in-depth follow
        up research to inform social performance management decisions

The following areas were defined, which, if addressed, will bring about significant
improvement of the social performance systems of Tamweelcom :

    -   While broad social goals of the organization are well understood, it lacks specific
        SPM objectives supported by a set of indicators and targets in the three areas of SP

    -   A clear definition of target clients is lacking that make targeting less effective and
        prevents field staff from being more proactive

    -   The organization’s use of SP relevant monitoring information is very limited. A set of
        SP monitoring data based on SP objectives as a basis for regular reports is necessary

    -   Currently available SP-relevant information is underused for decision making and
        monitoring, partly because it is not integrated into MIS

    -   SIS needs to better refelect a balance between social and financial performance

Based on the panel discussion, key ideas that Tamwwelcom will consider implementing in
the nearest future in order to further develop their social performance management
systems and to ensure further success in social results, are the following:

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    -   Formalize SPM effort inside the organization – assign responsibilities to the SP

    -   Review the mission so that clearly states social goals in the three SP areas: target
        clients, meeting their needs, and expected change

    -   Based on the mission analysis, develop specific SP objectives, indicators, and targets
        in the three SP areas

    -   Review information systems; put to use existing SP relevant information, add
        indicators as needed to create regular SP reports

    -   Strengthen SPM through quality monitoring information (ensure we collect
        monitoring information and its quality is high)

    -   Use a sample of clients to obtain information on positive changes in clients

    -   Revise SIS to ensure a better balance between financial and social goals

The report contains many more specific conclusions and information that present a more
detailed picture of the organization’s systems in their relation to the support of social
performance management. These should be used by the management as a framework for
the decision-making and approaches to the improvement of the MFI’s social performance.

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                       Dimension 1: Intent and design
                     Sub-dimension 1.1: Setting SP objectives
                                                    Evidence for strengths
          Tamweelcom strengths
1-      A clear written mission statement       There is a general understanding of
         that has broad implications and          the purpose of MFI.
         was known to everyone; board,           The mission is strengthened
                                                  through periodic internal training
         managers, all staff and clients is       and discussions with staff.
         in place.                               All interviewed staff were able to
                                                  explain what the MFI want to
                                                  achieve according to its mission.

2-      MFI is trying to target socially        The choice of methodology (85%
         relevant segments of population.         group) is appropriate for women
         Outreach objectives are rather           and poverty targeting.
         general (except for women
         outreach)                               In Operational Plan e for 2007 to
                                                  2011 percentage of total female
                                                  active clients at or above 85% is set
                                                  as an objective

3-      There are visible changes in            Changes in clients are visible to
         client’s life. However, they are         loan officers, through field visits,
         not regularly monitored or               and permanent contact. Change in
         registered; there are no specific        clients is traced down mainly to
         objectives in the area of positive       empowerment of clients (women),
         change in clients                        Improvement in households,
                                                  increased access to children
                                                  education are important change
                                                  factors for MFI.

4-      There is an understanding of            The Board is encouraging
         necessary balance between                management to develop SPM
         financial and social goals among         systems
         the Board and Management of
         the MFI. However, on the field          When asked about the necessity to
         level this does not translate into       collect social information, loan
         specific operational targets             officers said that it will also help
                                                  them to reach the target in terms
                                                  of general outreach

                                                 The MFI is open to introducing
                                                  measurable social objectives and
                                                  indicators: managers mentioned
                                                  they started thinking and adding
                                                  social indicators. Loan officers are
                                                  open to the idea.

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                                             The board is financially and socially
                                              oriented – keen to implement SPM,
                                              good balance of Fin/Soc
                                             Wiliness to learn more about SPM
                                              from managers
                                             No resistance to the concept of
                                              poverty focus across the
5-      The organization behaves as a       The MFI gives the highest salaries,
         socially responsible corporate       benefits, and incentives compared
         citizen towards Staff                to other MFIs in Jordan (Staff
                                              enjoys good economic package –
                                              e.g. health insurance)

                                             High loyalty among staff (16% staff

                                             Remuneration system is highly
                                              transparent: each LO can calculate
                                              their bonus

                                             There is a quality bottom up
                                              feedback system – LOs have an
                                              opportunity to contribute to issues
                                              of NPD, advert campaigns, etc.
                                              based on knowledge they receive
                                              from clients

                                             Promotion system provides clear
                                              career plan (most branch managers
                                              and some mid-managers were
                                              internally promoted)

                                             Management responds well to staff
                                              needs. The MFI has a systematic
                                              complaint system for staff

6-      The organization behaves as a       Strong incentive system for clients
         socially responsible corporate      MFI provides important non-
         citizen towards its clients          financial services - souk – market
                                              access, free access to medical
                                              services to clients
                                             The clients said “They want to see
                                              us in the best possible situation –
                                              bigger, more successful projects,
                                              send children to school, community
                                              to become more educated”, “This is
                                              a community service”; “ I now can

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                                                  send my son to school”

                                                 Transparent pricing

                                                 Feasibility studies for start ups, and
                                                  craft training
                                                 Provision for loan insurance
                                                 Pro-active mechanisms for client
                                                  complaint – client call center

7-      MFI demonstrates strong social          Educational grants offered to
         responsibility towards                   clients and community members
         communities                              Promoting start up enterprises and
                                                  job creation
                                                 Donation to the SOS village

              Tamweelcom areas for
                 improvement                           Evidence for gaps

1-      Tamweelcom lacks a set of SP            Operational and business plans
         objectives, which would have             contain very limited social
         supported it in maximizing social        performance objectives, e.g.
         results (in areas of target client       women outreach
         outreach, meeting the needs of
         target clients and contributing to
         the positive change in clients)

2-      MFI demonstrates a gender               Two out of 7 board members are
         misbalance in terms of board and         women;
         management composition. Only
         50% of LOs are women while              Three out of 13 branch managers
         women constitute over 85 % of            are women (recent developments)

                                                 50% of the loan officers are women

     Sub-dimension 1.2:strategy for achieving social performance objectives
              Tamweelcom strengths                  Evidence for strengths
1-      The range of products currently         Tamweelcom offers group and
         offered (group and individual            individual business loans, loan
         loans, insurance, non-financial          insurance, marketing services to its
         services meet major needs of             clients
         clients                                 The range of loan sizes might be
                                                  detrimental to the poverty

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                                                    outreach – high entry thresholds in
                                                    loan sizes

     Tamweelcom areas for improvement                    Evidence for gaps

2-         Targeting strategies are limited;      Currently used targeting strategy
            some potentially useful poverty         seems to be the geographic
            outreach strategies are not             outreach in poverty pockets and
            employed – e.g. rural outreach          assessment of availability of
                                                    potential market. No poverty
                                                    evaluation tools of incoming clients
                                                    are used

                                                   P Rating: “for the most part JMCC
                                                    serves predominantly urban and
                                                    peri-urban clientele and does not
                                                    plan to enter rural areas with
                                                    smaller and often contaminated
                                                    markets.” Page 8.

                                                   Women targeting is clear and

3-         Lack of definition of poverty          Examples from a loan officer: We
            concept and of targeting tools          want to serve poorest families and
            decreases Tamweelcom’s ability          small entrepreneurs. When we go
            to reach poor clients                   to the site we can see who is poor

4-         In product development process         Some poor might not have
            the needs of poorer clients have        guarantor, which is a requirement
            not been fully incorporated and         for individual loans, comment from
            hence, current loan products do         CEO
            not fully meet the needs of
            poorer clients                         Bigger loans require more
                                                    guarantors even though clients
                                                    have a lot of experience with the
                                                    MFI – this is annoying to them

                                                   Family members cannot be
                                                    guarantors – in other MFIs they can

5-         There is no systematic and direct      Client change is perceived through
            measurement on intended                 proxies (growth of loan size, staying
            impact                                  with the institution through
                                                    multiple cycles); those proxies are
                                                    focused on aspects of economic
                                                    growth of clients

                                                   Understanding of social
                                                    performance on the level of client

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                                                      success stories

6-      Some important SP information is            Loan officers collect information on
         not included into the systems and            the change in clients’ life
         is not supported by                          informally. (We collect only
         corresponding indicators                     financial information from clients –
                                                      but social information we know but
                                                      do not collect)

7-      Direct community level social               No systematic plans for educational
         responsibility activities are not            grants
         well planned, budgeted, and
         executed; hence often they are

                                    Discussion points
        How to account for differences of priorities of different stakeholders in terms of
         strategy and mission understanding?

        Geographical/demographic targeting seems to work well for group loans – no
         need to change, especially from the viewpoint of costs

        Might consider application of targeting tools for individual loans

        How broad should the definition of target clients be?

        What change do we really mean by our mission?

        How does community level social responsibility of Tamweelcom look like in the
         context of Foundation social activities?
                                   Issues to be addressed
        To define characteristics of target clients, including poverty levels

        Ensure target clients definition is understood and used across the organization

        Develop social goals and objectives based on mission and covering three areas
         of social performance: target client outreach, meeting the needs of target
         clients and positive change in target clients

        Community social responsibility activities need to be supported by a better
         developed strategy
        Involve field staff in discussion about target clients

                                            Action plan

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        Rewriting the mission and vision is in process, to take into consideration more
         specific social aspects, by end of November 2008

        Have a clear definition of poverty and target client, and to be communicated to
         all staff
        Setting social goals and social objectives in the coming strategic plan
        Developing a pre selection criteria to be integrated in the application form
        Collecting more information about clients on ongoing basics as ex: when the
         clients come to pay or renew the loan, to become part of MFI’s policy
        Taking random sampling to ensure that we are using Microfinance as a tool to
         alleviate poverty


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         Sub-dimension 2.1: system for monitoring and understanding performance

              Tamweelcom strengths
                                                              Evidence for strengths
1             Efficient communication                  Management is available for staff when
-              across and down the                       they need them
               organization, including staff            Organizational culture: open door
               complaints and grievances                Existing complaint formats for staff
                                                        Suggestions and complaints from staff
                                                         are taken into consideration by top

2             Adequate communication                   Call center in place and operational
-              exists between organization              There is a system for client feedback and
               and clients                               complaint processing

3             The institution has                      Information sharing system between
-              information systems capable               MFIs
               of addressing client over

              Tamweelcom areas for
                 improvement                                      Evidence for gaps

1             No integrated specific                   MIS reports do not contain systematic
-              indicators related to social              social information and social reports
               objectives are collected
               regularly to monitor social

                                              Discussion points

         How to develop indicators?

                                         Issues to be addressed

         Effectiveness of client complaint system needs to be verified

         Weak understanding of social performance indicators – but quick understanding by
          management and staff when explained
         Produce social reports

         Analysis of social reports and use in decision making

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                                                     Action plan

            To include SP indicators into MIS to track SP and to produce reports related to SP
            Official decision from top management to formalize MFI’s social performance
             should be made
            Develop new compatible MIS application with MFI social performance intentions

            Training for all staff concerned by the process

            Ensure the quality of data collection data entry - develop procedures

                Sub-dimension 2.2 information system quality and appropriateness

                 Tamweelcom strengths                              Evidence for strengths

1-           Resources for qualitative research          Market studies and surveys developed
              relevant for capturing SPM                   and implemented by marketing
              related information – including              department, especially in regular NPD
              skills, staff, experience – are              and product adjustment
2-           Regular contacts between loan               Strong client follow up by LO and branch
              officers and clients present a solid         managers as prescribed by loan process
              foundation for SP information –
              when MFI decides what and how
              they need to collect
3-           High quality of information                 MIS provides effective and efficient
              system – available, flexible, and            information; can generate reports on
              computerized                                 demand, including various bases for
                                                          Capacity to introduce modifications in the
                                                           MIS architecture, if required
                                                          Skilled IT department, and flexible MIS
                                                          Technical level of employees is adequate
                                                           for efficient use of information resources
         Tamweelcom areas for improvement                             Evidence for gaps

1-           Information for SP purposes is not          Loan application
              collected (apart from several               Income change report
              indicators – e.g. women clients,            No designed questionnaire for SP data,
              income levels change on loan                 MIS doesn’t include social data required
              renewal)                                    Markets surveys and studies are done
             Market research information is               from the financial perspective
              primarily focused on financial              Important SP information is not entered
              aspects, no information on client            into MIS – client income change
2-           Marketing, financial and statistical        No decisions has been taken based SP
              information potential for social             information

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              performance management is                 Information collected and used for
              underused even when available              making decisions is financial
                                                      Reporting system very well supports
                                                         financial decision making
                                                      Some social performance information
                                                         (marital status, nationality, income
                                                         change, PAR by type of clients, locations)
                                                         is collected but not used for SP purposes;
                                               Discussion points

             No Points

                                             Issues to be addressed

             How to approach implementation of changes

                                                     Action plan

             No Actions

                      Sub-dimension 2.3 Information analysis and communication

              Tamweelcom strengths                                 Evidence for strengths

1           Ability of the MFI to perform            MIS report; MIS is capable of segmenting data
-            segmentation of information               against numerous and relevant client
              Tamweelcom areas for                                  Evidence for gaps

1           Income information on clients            Client income change report
-            is available but not used for
             social performance
             management purposes
2           Client change information                Loan application form
-            (business growth) is collected
             before subsequent loan
             evaluation. Information is
             kept in hard copy
                                              Discussion points

            What is the quality of income change information

                                         Issues to be addressed

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        Put the income change info to managerial use and into MIS

        How to approach information system redesign?

                                         Action plan

        No Actions

                      Dimension 3: Management Systems

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                               Sub-dimension 3.1: Information use

                Tamweelcom strengths                             Evidence for strengths

           Tamweelcom has extensive                       The marketing and studies
            experience designing and modifying              department is very involved in any
            products based on quality market                product development process.
            research                                       Interest rate, loan process, guarantee
                                                            requirements were adjusted based
                                                            on MR
           Client level information was used for          Free client life insurance was
            preventative action                             introduced
          Tamweelcom areas for improvement                          Evidence for gaps

          Information on social performance is           The absence of social objectives,
            not systematic. There is a lack of SP           indicators and targets is critical. The
            monitoring information                          institution is aware of the objectives
                                                            setting process but only for financial

          The institution doesn’t use MIS             Though MIS system has some social
            system to monitor social                     performance related information
            performance                                  about the clients - gender, age,
                                                         marital status, product – it is
                                                         underused in the management
           Not all the information available         The loan officers in the field have
            about social performance is used by          some social information about the
            the organization                             clients that they collect in an
                                                         informal way, the use of client
                                                         income information is unclear
                                           Discussion points

                                                  No Points
                                       Issues to be addressed

           Ensure that an appropriate information system is set up to support SP objectives

           Analyze existing information and put it to best possible use for SP management

                                              Action plan

              
            Evaluate the existing information about SP
              
            Evaluate the need on information to support the realization of social objectives

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                             Sub-dimension 3.2: Decision making

              Tamweelcom strengths                          Evidence for strengths

1-       Client level information helped the         Individual loan product was
          institution take preventive actions          developed to address possible client
                                                       desertion and to provide clients with
                                                       opportunities to get loans better
                                                       suited to their business needs
                                                      Client insurance was introduced
                                                       based on client needs assessment
         Tamweelcom areas for improvement                       Evidence for gaps

1-       Decisions are based on in depth ad          Informal information (e.g. LOs
          hoc information not on monitoring            feedback) seems to be a large part of
          information                                  decision making
                                                    Monitoring information for decision
                                                       making is not available in the SP area
2-       The strategic and operational             The choice of the target is based on
          decisions are taken based on a strong        repayment capabilities.
          financial performance objectives but      The choice of area of intervention is
          not necessarily include social               based on governmental statistical
          performance implications                     information
                                         Discussion points

         No Points

                                     Issues to be addressed

         The institution strategic and operational decision making needs to be aligned with
          the mission as specified by SP goals and objectives
                                            Action plan

         No Actions

                          Sub-dimension 3.3: organization culture

              Tamweelcom strengths                          Evidence for strengths

1-       The board members are open and              The board is a panel of different
          supportive of the mission. They              backgrounds with a common goal of
          represent a balance between                  achieving Tamweelcom mission.
          financial and social perspectives           The board is socially oriented and
                                                       keen to implement SPM encouraging
                                                       management in this area
                                                      All the staff members interviewed

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                                                         share the same system of values and

2-       Staff, management, and board                  Mission is supported by training of
          members share the same vision and              staff and discussions during monthly
          system of values in alignment with             meeting and meetings (every 3
          the mission                                    months) with upper management
3-       Strong social culture of the institution      The institution provides orientation
          is supported by internal training and          training to new staff hired to
          discussions at staff meetings                  communicate organization's mission
                                                         and vision
                                                        Tamweelcom participates in MF
                                                         initiatives aimed at SP/SPM
                                                         improvement that are widely
                                                         discussed among staff
4-       The senior leadership and the board           Open-door office culture,
          demonstrated a strong leadership               participation and winning numerous
          and social focus                               MF innovation awards
                                                        Management team demonstrates
                                                         good team work
5-       Tamweelcom demonstrates an open,              Numerous government and MF
          learning, innovative culture                   sector awards for innovation,
                                                         transparency, etc.
         Tamweelcom areas for improvement                         Evidence for gaps

1-       The social goals and objectives are         All the staff members share the same
          not understood in the same way               system of values but understanding
          across the organization                      of the social dimensions are different
                                                       from an interviewee to another due
                                                       to the absence of clear social
                                         Discussion points

         No Points

                                       Issues to be addressed

         Tamweelcom needs to continue efforts to support the social culture as SPM
          systems are developed and implemented, especially uniform understanding of
          specific SP goals and objectives
                                           Action plan

         No Actions

17                                                            Tamweelcom Social Audit Report
                  Sub-dimension 3.4: alignment of organizational systems

               Tamweelcom strengths                            Evidence for strengths

1-       The staff recruitment and training is          During the initial training, the
          aligned with mission                            mission is well explained.
                                                         The institution is hiring loan officers
                                                          from local communities
                                                         The institution is trying to be gender
                                                          sensitive, during the recruitment
2-       The organization enjoys an effective           Many changes are happening in the
          change management system that will              Institution e.g. new products, most
          allow the institutionalization of SPM           the top management staff has just
                                                          joined the institution (3years), etc.
                                                          Tamweelcom successfully manages
                                                          these changes
         Tamweelcom areas for improvement                         Evidence for gaps

1-       The incentive system needs to be             Incentive system components are:
          balanced between social and financial         outreach, repayment rate, and new
          performance                                   loans. Clients retention rate is the
                                                        only socially relevant parameter of
                                                        existing SIS
                                         Discussion points

         No Points

                                      Issues to be addressed

         To tie incentives system to both social and financial performance so that it
          encourages both financial and social performance

                                            Action plan

         Revise the incentive system to better reflect a balance between financial and
          social performance

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