Where Good Intentions Meet Good Business Practice

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Aug 17, 2016
Meraj Husain, Micol Pistelli

Over the past eight years, more than 1,000 financial service providers (FSPs) have demonstrated their commitment to information transparency by reporting social performance data to MIX. Drawing from this wealth of information collected, we conducted a regression analysis that explores the synergies and trade-offs between social, operational and financial performance using data reported by 780 FSPs during the 2014-2015 period. This is MIX’s second analysis on this topic, after the study performed in 2010 on a smaller sample of 200 FSPs. The entire array of social performance indicators1 that MIX collects were analyzed against productivity, portfolio quality, and efficiency. Statistically significant findings emerged mainly in five areas, namely - governance, women as a target market, poverty segmentation by target market, social responsibility towards staff and borrower retention. This analysis supports most of the trends observed in MIX’s previous publication and also brings to light new meaningful findings. The implications of these results are powerful: social performance management is much more than just as a practice instrumental to the advancement of an institution’s mission. It is indeed a fully-fledged business strategy.