Microfinance & the Double Bottom Line: Measuring Social Return for the Microfinance Industry & Microcredit with Education Programs

This paper presents an analytical framework to measure social returns of microfinance. It explores ways for microfinance to access social investors. The paper applies the framework to microcredit with education programs.

Microfinance has established its value as a development tool, but its supply falls short of demand. The paper states that:

• Most private investors consider microfinance too risky;
• MFIs must pursue new capital sources by aligning the core qualities that distinguish them from funding competitors;
• Socially responsible investing aligns well with microfinance;
• Social investors value the combination of financial return and positive social impact, called the Double Bottom Line (DBL);
• Microfinance offers investors an opportunity to invest in the DBL;
• DBL acts as a foundation framework and a measurement tool for setting an MFI apart;
• DBL interprets financial value, quantifying social impacts, and establishing connections between input, output, and outcomes.

Socially responsible investors value DBL. MFIs should appeal to these investors with uniform measurements and universal metrics. Microenterprises with education programs, in particular, are well-suited to adopting DBL to express their accomplishments.