correspondent banking in brazil social performance & outcome assessment
TRANSCRIPT
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Correspondent banking in Brazil
Social Performance &
Outcome Assessment
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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
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Context• Correspondent banking in Brazil
• INSERT DESCRIPTION OF CB AND THE SERVICES THEY OFFER
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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
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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
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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
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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
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Environmental Performance
Measuring the environmental performance
Dimension Key question Indicators
GHG emissions
Waste management
Water consumption
Other
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Economic Performance
Measuring the economic performance
Dimension Key question Indicators
Profitability
Growth
Other
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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
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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
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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
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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
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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
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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
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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