Insightful new research on SP in microfinance; progress in SP reporting!

New Research on Relationship between Social and Financial Performance

MIX’s Lead Researcher Adrian Gonzalez has recently released a paper investigating the linkages between social and financial performance. Drawing on the 2008 MIX Social Performance Standards (SPS) Reports from 200 MFIs, Data Brief No. 7 – Microfinance Synergies and Trade-offs: Social vs. Financial Performance Outcomes in 2008 presents findings from regressions designed to evaluate the associations between Social Performance Task Force Indicators (SPTFIs) and some common financial indicators related to productivity, portfolio quality, and efficiency. The research both confirms and challenges common wisdom on social performance management in microfinance, while introducing some new postulations based on his analysis.

Specific results support that as expected, investment in staff training on Social Performance and Social Responsibility is associated positively with an MFI’s portfolio quality (although it is impossible to separate the effect from general training), while there is a negative relationship between financial efficiency and targeting of very poor or poor clients. Further results show that efficiency actually deteriorates as the percentage of urban clients increases, challenging the conventional belief that having a predominantly rural clientele increases costs and decreases efficiency.

Gonzalez concludes his report by suggesting some changes for the SPTF’s questionnaire to make future SP data more usable and informative. You can read a summary and comparative analysis of the results on MIX’s SP Indicators Blog, or read the full publication.

Update on Social Performance Reporting to MIX

Within three months of initiating its Social Performance data collection cycle in April, MIX has received a total of 217 Social Performance Standards (SPS) Reports for 2009. These reports combine with the 208 reports from 2008 to create an impressive pool of 425 SPS reports, an extensive range of data that will enhance analysis and transparency of the microfinance industry.

For MFIs, it is not too late to submit SP data and contribute to the growing movement toward the integration of SP into management. You can find the SPS Report template in multiple languages on MIX’s website at www.themix.org/standards/sp-reports - remember, the deadline for submission is September 30, 2010.

Awarding Social Performance Reporting

In addition to its presentation of 13 Social Performance Reporting Awards at the MFC Conference in Astana on May 27, MIX administered two Gold Awards at the MCPI Conference, held in Manila in mid-May. Criteria for selection for the award are enumerated on CGAP’s website here.

MIX collaborates with the IDB on analysis and a new SP award

This year, the Inter-American Development Bank (IDB) engaged MIX to contribute a short social performance analysis piece to the 2010 edition of the Latin America Champion League report, which MIX released at the end of June. MIX will contribute an additional report for the IDB’s Microscope publication, available in early October.

IDB has also partnered with MIX on the formation of its first Social Performance Management (SPM) award, which will be granted during IDB’s XIII Foromic conference in October 2010.

Upcoming Events

Presentations by Micol Pistelli, Manager of SPS Program at MIX:

SP Analysis on LAC Region. IDB’s Foromic Conference, Montevideo, October 6-8

SP Analysis on Asia. Asia Microfinance Forum 2010, Colombo, October 12-15

Social Performance Panel. Global Microfinance India Summit 2010, New Delhi, November 15-16

Recent SP Presentations

Measuring social impacts: a new challenge in a changing Europe. European Microfinance Network Conference, London, June 24th.

SPTF/MIX Indicators - Analysis of Social Performance Indicator Reporting. Social Performance Task Force Annual Meeting, Bern, June 30th.