Tracking Client Performance

This Practice Note discusses how microfinance institutions (MFIs) can cost-effectively monitor and improve their social performance. By monitoring, it refers to regular, systematic and on-going collection of timely and appropriate information that helps the staff and clients of an organisation to make decisions to improve the quality of their work.

Through monitoring the financial portfolio an organisation can respond to problems and reduce risk. If it also monitors success in meeting social goals, this will help to manage and improve social performance, by revealing patterns and trends in who is reached and how they perform. This information enables progress against objectives to be tracked; identification and response to problems at an early stage; seeing whether there are differences in performance for different client groups, different branches, products or staff; and assessment of the risk and performance of different products and services.

Together these contribute to improving the quality, efficiency and effectiveness of an organisation’s work. Monitoring provides an overall picture of performance rather than an understanding of the reasons for the trends and patterns observed. It, therefore, does not take the place of more in-depth assessments of social performance, but it helps to guide and complement them.

Monitoring systems can be an important resource to help an organisation manage social performance. However, careful planning is needed to ensure that the system is appropriate for its needs, capacity and resources. This Practice Note guides the reader through choices that need to be made in designing a system that suits their needs. As is stressed elsewhere in the Imp-Act Guidelines and Practice Notes, there is no single system that works for all organisations, but there are some key principals and things to avoid that will help guide through the process. In the end, the effectiveness of monitoring will depend on how an organisation uses the information to make better management decisions (see Imp-Act Practice Note 1 on feedback loops).

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