Reviewing the Social Performance of Microfinance Institutions
This paper begins by noting that most microfinance institutions (MFIs) have a social mission. They may aim to reduce poverty, to reach people excluded from financial services, to empower women or to promote community solidarity. This note is largely targeted at staff of MFIs who are trying to improve their organisation’s social performance (described here as the effective translation of their social mission into practice).
The paper suggests that effective MFIs have simple, routine, reliable and cost-effective systems for managing their social performance. These systems tell them who their clients are, what they think about the services they use and how their lives are changing.
This note aims to provide information on how to conduct reviews to improve the quality of a Social Performance Management (SPM) system. A social performance review can help an MFI: to consider how data collection, analysis and reporting can be improved; to ensure findings are being utilised; and to compare performance against your own objectives and the performance of other organisations. The paper argues that if this is done well, then it should be easier to respond to requests for information from other agencies, as well as to convince them of the validity of the social mission adopted and success in achieving it.
The paper is based around four key sections:
- Why carry out a social performance review?
- What should the review ask?
- Designing a social performance review
- Beyond social performance reviews: developing national and international standards and benchmarks?
Seven useful dialogue boxes are included within the paper to supplement the core text. These cover the following topic areas:
- Reviews, audits and ratings – clarifying terminology
- Linking social performance reviews to other activities
- Sample selection and checks on data quality
- The benefits of a small set of indicators
- Selecting branches, staff, groups or clients for interviews
- Suggested outline for a social performance review report
- Possible annexes to the review report