Social Performance Management
In the microfinance arena, an institution’s success has long been associated with financial performance but financial indicators only tell part of the performance story. The renewed interest in the social goals and value of microfinance is a response to the growing recognition that MFIs should be held accountable for the achievement of social outcomes as well as their financial performance.
The microfinance industry is evolving in a way where MFIs are increasingly required to be responsible towards the clients and community they operate in and transparent about the achievements of their objectives. An increasing number of donors and investors are requiring MFIs to track their progress in implementing the client protection principles or in assessing outreach to certain target markets.
Social performance, or the social bottom line, is about making an organization's social mission a reality. This may include serving larger numbers of poor and excluded people; improving the quality and appropriateness of financial services; creating benefits for clients; and improving social responsibility of an MFI. This definition has been provided by the Social Performance Task Force (SPTF), an international group composed of investors, donors, MFIs, microfinance networks, research agencies, and other stakeholders united in the goal of defining, measuring, and improving the social performance of MFIs. MIX has been an active member of the SPTF since its inception and is member of the SPTF steering committee and leads the SPTF’s working group of social performance indicators.
For additional information about social performance, check out these resources:
- The SPTF Companion Resources
- Social Performance Task Force (SPTF): www.sptf.info
- Grameen Foundation Progress out of Poverty Index™(PPI™): www.progressoutofpoverty.org
- Imp-Act Consortium www2.ids.ac.uk/impact
- MFTransparency: www.mftransparency.org
- Smart Campaign: www.smartcampaign.org
- Seal of Excellence: www.microcreditsummit.org/papers/Seal/Joint_Letter_5-30.pdf