The broad range of structures, mandates and shareholders of Development Finance Institutions (DFIs) working with the private sector means that there are many different systems used to track development results. The shared clients of these DFIs therefore often endure an unintended burden deriving from the DFIs’ different reporting requirements, including similar indicators (with different definitions) meant to capture the same data.
Efforts to mitigate this burden began in 2008, and progress accelerated 4 years later when over 20 DFIs formed a Working Group (Whole Group) on Indicator Harmonization that agreed to benchmark indicators for private sector investment operations and seek examples of best practice for shared adoption. Over 400 indicators used by the DFIs involved in the effort were reviewed while the Whole Group grew to include 28 DFIs.
A first set of 28 indicators was agreed in the form of an MoU, signed in October 2013. It mandates that (I) if a DFI tracks development results, it will use the harmonized definitions and units of measurement; and (ii) if it has a results tracking system in place that already features indicators that are the same as the harmonized ones, it will replace them accordingly. There is no obligation, however, to start tracking and using the harmonized indicators if a DFI does not wish to track the development outcomes they capture.
In October 2015, MoU was amended, to include the harmonized definitions of an additional 11 indicator, making a total of 38 indicators.
These standard metrics with their definitions and units of measurement are widely used by DFIs and other development partners. The HIPSO indicators are also in alignment with the SDGs.
There are currently 28 DFIs in the HIPSO Whole Group.