The Double Bottom Line: Evaluating Social Performance in Microfinance

In the microfinance arena, success of a microfinance institution (MFI) has long been associated with financial performance outcomes measured by loan portfolio quality, operating efficiency and profitability. Yet, these indicators tell only part of the performance story in microfinance. Most microfinance institutions strive to meet both financial and social goals, managing a double bottom line. Strong financial performance underpins an MFI’s ability to pursue its social objectives, and conversely, achieving social goals generally enhances financial performance.