OBS is part of Opportunity International network. The organization was founded in 2002 and now has more than 54,000 borrowers and about 30,000 savers. OBS is practically the only source of financing for small farmers and microentrepreneurs in Serbia. The Bank was the first in the country to become a member of the Global Alliance for Banking on Values (GABV), the umbrella organization for the world’s ethical financial institutions.
Mirjana, thank you sharing with us your experience with the Universal Standards for Social Performance Management. When did you start working on SPM? Why did your organization decide to conduct SPI4 audit?
The Opportunity International network defined a strategy in 2013 that made social performance amandatory activity for all its partners. The first step in the strategy was to do a social assessment and prepare for Smart Client Protection Certification.
I opted to use the CERISE-SPI4 tool for the initial self-assessment, since it includes both the USSPM and the Smart Campaign Client Protection Principles.
Using the Universal Standards has led us to make changes like creating a Social Management Committee within our Board of Directors that meets quarterly to discuss progress towards the Bank’s social goals and plans for the future. We have also included social goals into our business plan and developed our own methodology for measuring the portion of low income, rural and underbanked clients, as PPI data are not available for Serbia.
Can you tell us more about your own metrics to track financial inclusion?
OBS has a mission of financial inclusion that is already monitored by tracking the share of rural and low-income clients in our portfolio. The poverty level of new clients is measured during credit analysis for all loan products and compared to per capita household income data retrieved from the National Office of Statistics of Serbia. This is automated in the MIS, which generates automatic reports.
Recently, we have started using information from the Credit Bureau, which allows for simple, automatic, MIS-based access to clients’ loan history. We started to measure and report on the number of new credit clients with no previous loans, based on Credit Bureau data.
A most of our clients need constant financial support, if they haven’t been using a loan in the last three-year period, we are pretty sure that it is due to the lack of access to financial services – because of insufficient or irregular income, because the business was in the start-up phase, or simply lack of information.
We also collect data on clients with no previous loans through a Quarterly Client Satisfaction Survey, and these sample-based data are completely in line with what’s reported through our MIS with the help of Credit Bureau reports. This information from the Credit Bureau remains a simple and good proxy for financial inclusion!
You have also worked on the complaints from your clients?
Yes, we redesigned the mechanism for resolution of “informal client complaints”. Serbia’s Central Bank has very strict and complex regulations regarding formal client complaints. Therefore, the number of formal complaints is low, as the typical OBS client is not able to understand and abide by complicated procedures.
As of December 2018, clients can submit informal complaints using four new channels: text messages, Viber, emails and Facebook Messenger. This new mechanism helps us correct important irregularities and issues, and hence improve services. Clients are quite thrilled to have someone from the bank (usually a branch manager) call them and inform them about their complaint status, resolution or simply just apologize.
Mirjana, overall, what did you learn? What are for you the key lessons of this work on SPM?
First of all, implementation of SPM standards is a process that needs to be constantly revisited and improved. There are no “one size fits all” solutions when measuring the achievement of social goals – each MFI needs to adjust to its context, its social mission and targeted clients.
We also learned that developing products especially aligned with SPM principles have great (and perhaps unused) potential. More thought has been given to protection of clients’ rights, and to better defined procedures.
Back in 2013 when we first started to learn about SPM, we thought that the concept was not applicable in our bank, due to the country context (hardly anyone in Serbia knows what SPM is so it is usually very difficult to explain what I do!). However, once you dive deeper into the Standards, especially if SPI4 is used, the whole idea and purpose of this exercise becomes clearer.