Post on 14-Jan-2016
description
Correspondent banking in Brazil
Social Performance &
Outcome Assessment
Presentation Outline• Context• Objective• Performance of commercial banks and their CB operations
– Social, Environmental, Economic• Outcome assessment of CB services on :
– Clients– CB Operators– Local economy
• Methodology• Indicators• Next steps
Context• Correspondent banking in Brazil
• INSERT DESCRIPTION OF CB AND THE SERVICES THEY OFFER
Objective1. Identify indicators to measure :
– The Social, Environmental and Economic Performance of commercial banks and their CB operations
– The Outcome of CB services on :a) Clients b) CB Operatorsc) Local economy
2. Determine the methodology to obtain the data annually
Performance of commercial banks and their CB operations
• Access : intent and outreach• Cost and quality of services• Information transparency
• GHG emissions• Water consumption• Waste management
• Profitability of CB operations• Growth of CB offering
Social Performance
Measuring the social performance : Access
Dimension Key question Indicators
Intent • Do CB services have the objective to reach a social goal?
• Corporate policy or strategy to meet social objectives through CB
Breadth of outreach
• What portion of the population served?• How many clients are being served?• How many are in rural areas?• How many are women?
• # of CB/municipality• # of CB/habitants or # habitants/CB• # of unique accounts/population• # of active clients/population• Geographic distribution of clients• # women clients/total clients• # of different services offered
Depth of outreach • How poor are the clients? (based on national poverty line)
• National poverty line• # poor clients/total clients• Avg. amount of bills paid/month• Avg. benefit payment value• Avg. savings balance• Avg. loan size
Source: CGAP and The Social Performance Task Force
Social Performance
Measuring the social performance : Services
Dimension Key question Indicators
Cost • How much are the clients being charged for the services?
• Avg. fee per transaction• Real interest rates of loans
Quality • Are clients being offered a variety of services?• Are the services designed to meet clients’ needs?•Is the bank committed to providing quality services (or to improving the quality)
• # of different services offered/client• % all services• % bill payment only• % savings and payment• etc.
• Client participation in product development• Client services policy• Client feedback mechanism
Information transparency
• Are the cost of the services explained clearly to the clients?
• Transparency policy• Access to clear and up to date information on pricing• Financial education programs• Annual report
Source: The Social Performance Task Force
Environmental Performance
Measuring the environmental performance
Dimension Key question Indicators
GHG emissions
Waste management
Water consumption
Other
Economic Performance
Measuring the economic performance
Dimension Key question Indicators
Profitability
Growth
Other
Outcome assessment of CB services
•Longevity as a CB•Profitability•Benefits on other part of the business
• Impact on local businesses•Taxes raised•Other benefits
DimensionsTarget
Outcome assessment of CB services
Clients Operators Local economy
Survey (Stratified randomization)
SurveySecondary data : central bank and PROCON
Interviews with local officialsSecondary data (baseline + progress)
Pilot in one geographic region Pilot in one geographic region Pilot in one geographic region
Risks : self-selection bias, non-respondent bias, reporting bias, interviewer bias
Risks : self-selection bias, non-respondent bias, reporting bias, interviewer bias
Risks : reporting bias, interviewer bias, availability of data
Methodology
Outcome assessment of CB services
Clients Indicators
CLIENTS
Dimension Key question Indicators
Access to finance • What kind of financial services does the CB client have access to?
• # of active bank accounts, by type• # of active loans, and reason for each loan (consumption, business, mortgage)• # of other CB services used in typical month
Over-indebtedness • Is the client over-indebted? • # of instalment missed on active loans
Financial education
• Does the client with a loan know the real interest rate being charged?
• Ability to state the real interest rate on loan or cost of loan
Satisfaction level • Is the client satisfied with the services :• Service• Hours of operations• Availability of funds• Transparency• Other…
• Satisfaction level (scale of 1 to 10)
Fraud • Has the client encountered fraudulent behaviour from a CB?
• Additional payment required• Spending on premises required
• # of times that a fraudulent behaviour occurred in the last year
Outcome assessment of CB services
Clients Indicators
CLIENTS (cont’d)
Dimension Key question Indicators
Income • Is the client employed or self-employed?• Has the income level of the clients improved?
• Employment status / sources of income•Annual income
Assets • Does the household have assets? • House, land, cattle, car, savings etc.
Living conditions • Have living conditions improved ? • Home improvements (walls, roof, floor)• Toilets, stove, refrigerator, TV
Health & nutrition • Has the family health improved? • # of meals with protein/week
Children’s education
• Do all boys 6-14 go to school?• Do all girls 6-14 go to school?
• # of children aged 6-14• # of boys, girls that go to school
Women’s conditions
• Has the woman’s economic independence risen? Education? Literacy?
• Access to services• Economic participation• Education level and literacy rate
Time/$ saved • Has access to a CB reduced the time and cost required to do a financial transaction?
• Time saved since use of CB• Money saved since use of CB
Local spending • Has access to a CB led the client to spend more locally?
• Money spent with local retailers/month• Money spent in other cities/month•# of trips to other cities to purchase goods or services/month
Outcome assessment of CB services
Clients Indicators
CB OPERATORS
Dimension Key question Indicators
Longevity • How long has the CB been in operation? • Months of operations
Profitability • Is the CB generating a return for the operator?
• Cost/revenue•Total revenue received(commission, fees)•Total operating costs(electricity, salaries etc.)
• Increase in staff since CB
Services offered • What type of services does the CB offer? • Financial services offered
Credit demand • What percentage of loans are approved? • # of loan applications received in last quarter• # of loans approved/refused/in process in last quarter
Other benefits • What kind of spill over effects does the CB business bring to the operators
• Increase in patronage• Increase in revenues other than CB revenues• Other benefits / negative effects
Outcome assessment of CB services
Clients Indicators
LOCAL ECONOMY
Dimension Key question Indicators
Impact on local businesses
COMMUNITY WITH A CB :• Have there been new businesses created since the introduction of the CB?
COMMUNITY WHERE A CB CLOSED OR OPENED IN OTHER COMMUNITY (Novo Ceu) :• Have there been businesses that have closed after the CB ceased to operate?
• # of businesses created (formal and informal)
• # of businesses closed (formal and informal)
Taxes • Did the municipality see revenues from businesses taxes grow? Decrease?
• Taxes raised in the municipality
Other effects • Has the municipality benefited in other ways?• Has the municipality suffered in other ways?
• Sense of community• Pride
Next steps• Refine the data gathering methodology for the outcome assessment• Develop the questionnaires for the three target groups• Conduct a pilot to test the questionnaire and the methodology