Information for Accountability and Performance Evaluation of Civil Society Organizations Providing Microcredit: a multi-case study

Helda Kelly Dos Santos Pereira,Vera Maria Rodrigues Ponte,Marcelle Colares Oliveira

doi:10.15728/bbr.2007.4.3.5

Abstract

This work investigates the generation of information by public-interest civil society organizations (organizacoes da sociedade civil de interesse publico, or OSCIPs) that operate with microcredit to support their accountability, and the use of this information in analyzing their financial performance. In the process of building up scientific knowledge for this work, an exploratory study was conducted of organizations of the third sector, focusing on public-interest civil society organizations that provide microcredit and the information they use to render accounts and evaluate their performance. It is an exploratory work, guided by bibliographical and documental research and a multi-case study carried out through an interview assisted by a semi-structured checklist, whose data were then treated through the technique of content analysis. The conclusion is that albeit still incipient, the microcredit organizations studied seek to measure their performance and act in a transparent manner, including meeting the requirements of the agents that provide their funding, and that this openness is a differential in obtaining new funding.

Highlights

The economic stabilization in Brazil in 1994 marked the emergence of microfinance institutions in the country, a development that was in line with the growing interest of municipal and state governments to support the creation of non-governmental organizations (NGOs) specialized in microcredit
We found that, still incipient, the OSCIPs try to measure the performance of their work and are making an effort to meet the demands of the agents that fund them, so that based on transparency, they can build a differential in the search for new funding sources
We found that: (a) the entities studied draw up all the accounting statements and produce specific reports to meet the needs of their funding agents; (b) much of this information does not have a fiscal nature; and (c) the law governing OSCIPs obliges them to publish these statements as a way of rendering accounts ot society about the use of the funds under their responsibility

Summary

Introduction

The economic stabilization in Brazil in 1994 marked the emergence of microfinance institutions in the country, a development that was in line with the growing interest of municipal and state governments to support the creation of non-governmental organizations (NGOs) specialized in microcredit. An important landmark in this respect was a revision of the legal framework, articulated by the Community Solidarity Council, which culminated in 1999 with enactment of the socalled Third Sector Law (Law 9790/99), sometimes called the OSCIP Law. An important landmark in this respect was a revision of the legal framework, articulated by the Community Solidarity Council, which culminated in 1999 with enactment of the socalled Third Sector Law (Law 9790/99), sometimes called the OSCIP Law One provision of this law is that OSCIPs are not subject to the rule against usury (which limits the interest rate to 12% a year), and it instituted the so-called Partnership Instrument (Termo de Parceria) to specify the mutual obligations between these institutions and government entities when receiving official support. 1), three elements characterize the new management posture of third-sector organizations: “transparency (accountability), evaluation reports (performance) and communication instruments (accounting reports).”

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Conclusion