Guidelines to Evaluate Social Performance

This issue of InSight describes a framework that MFIs can use to assess and report on their social performance. Measuring and reporting on social performance is a key way for double bottom line institutions to define the social value they create, while holding themselves accountable for the goals articulated in their mission. MFIs measure social performance to provide information, improve organizational performance, mitigate risk and differentiate themselves from other financial institutions. Investors do so to monitor an MFIs performance, evaluate investment opportunities, improve reporting and governance and disseminate information. ACCION used indicators from different frameworks to create a specialized microfinance evaluation tool. It applied this framework to analyze how six leading MFIs adhere to these social performance criteria. The paper presents findings from this study and highlights challenges to mainstreaming social performance. They include trade-offs between:

• Multitude of frameworks and the rush to standardize;
• External assessments and self-evaluation;
• Credibility and practicality;
• Specificity to microfinance and a broader approach;
• MFI mission and broader development goals.