At the Social Performance Task Force
(SPTF), we believe that measuring social performance in microfinance is not
only possible but also necessary for any MFI that is client-centered and
concerned about the achievement of its social mission. However, the experience
of tracking social performance data in a rigorous and systematic way is new and
we still have a lot to learn.
We are currently talking about a gradual process that requires strategic planning, a Management Information System able to track the information, and specific training of MFIs. It doesn’t have to happen all at once but it is imperative that the industry understands its relevance and actively seeks this information. We hope that this blog can contribute to this purpose.
Why are we concerned about social
performance standards for microfinance?
Each MFI has its own development
objectives, such as poverty reduction, creation of employment opportunities,
new business development, and so on. Independent of such specific social goals
and the legal composition of the institution, however, are standard indicators
that can help MFIs define who they want to reach (outreach), their plan for
serving target clients (methodology), and what benefits they hope to create
(change).
Since 2005, the
global, industry-wide SPTF has focused on developing ways to measure social
performance in microfinance, which has resulted in the creation of 22 social performance
indicators to assess how an MFI aligns its systems to its mission and how it
uses social performance information to reach its social goals. These standard
indicators are simple, relevant for an MFI to track, useful to improve the
MFI’s overall performance, and easy to validate by an external stakeholder.
The Microfinance Information
eXchange (MIX) has created a report
that collects and defines these indicators. Having sent the report to all MFIs
registered in the MIX Market as of February 2009, MIX is now collecting data
for the year 2008 and will close data collection for that year in December
2009.
