At the Global Microcredit Summit, the Global Advisory Committee for the Seal of Excellence assured attendees that the seal will help the microfinance sector to further its social endeavours.
At the first plenary session of the summit, a document drawn up by Frances Sinha, director of EDA Rural Systems in India, was presented, about the development of the Seal of Excellence for Poverty Outreach and Transformation in Microfinance.
The panel included the members of the global advisory committee: Isabel Cruz Hernández, president of the Latin American and Caribbean Rural Finance Forum in Mexico; Anne Hastings, executive director of Fonkoze Financial Services in Haiti; Christopher Dunford, lead researcher at Freedom from Hunger in the US; John de Wit, managing director of the Small Enterprise Foundation (SEF) in South Africa; and Manuel Méndez del Río Piovich from Fundación Microfinanzas BBVA, who chaired the panel.
“The idea of a Seal of Excellence in microfinance is to set a vision for the sector in terms that highlight the potential of microfinance to serve the poor and to contribute to a positive transformation in the lives of clients and their families and communities,” wrote the report’s author, Frances Sinha.
“The aim is to analyse the value of microcredit in the lives of the poorest people. Not only must it be sustainable, but we must also analyse the value we can offer to customers,” she explained during the session.
This seal will be developed by the advisory and technical committees, with a view to deciding on the implementation process over the next six months. “The microfinance sector will be redefined to be responsible, sustainable and contribute to achieving a positive change,” said the author.
Sinha explained that a seal would also provide a means of identifying and recognizing microfinance institutions (MFIs) that implement this vision using objective criteria based on a double-bottom-line ethos that underscores both the social and financial performance of MFIs. “This idea is increasingly relevant today, as recent developments — even crises — in some countries have demonstrated the risks of concentrating on the single bottom line of financial performance alone,” she said.
During the session, the president of Fundación Microfinanzas BBVA, Manuel Méndez del Río Piovich, said that this is a “magnificent time to strengthen the ethical commitment to seek sustainable economic and social development.”
The managing director of the Small Enterprise Foundation (SEP), John de Wit, assured attendees that the aim is to differentiate between constructive microfinance institutions that help people to get themselves out of poverty, and those that do not.