Social Performance in Microfinance | Microfinance Reporting Standards

Interested in learning the latest about social performance in microfinance? Follow and comment on the new Social Performance Indicators Blog, managed by MIX.

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.

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. Currently, there is a lack of information about key values, a lack of evidence about what is being achieved and, to the extent there is information, a growing recognition that achieving social goals requires a deliberate and focused strategy by MFIs.

In response to this rising demand for information and accountability on social performance, the Social Performance Task Force (SPTF) was created several years ago to address these issues and to help develop standards and indicators on which MFIs can report. MIX has been an active member of the task force from its inception. Click here to learn more about the SPTF.

MIX’s role is to be a leader in the process of creating a core set of indicators for the microfinance industry to report on social performance; collect data on the social performance indicators and make them available publicly; improve social performance benchmarks which will eventually be integrated into the MicroBanking Bulletin benchmarks; and disseminate and promote information sharing and news about social performance reporting and standardization.

To learn more about social performance in microfinance and MIX’s leadership role, view the Social Performance Presentation - October 2009 (also available in Spanish and French) and its Executive Summary.