Managing Social Performance in Microfinance: Building Successful Clients and Successful Institutions (Practice Note No. 9)
This article defines Social Performance and Social Performance Management (SPM), and discusses the importance of having an SPM system to improve the effectiveness of microfinance institutions (MFIs). The article describes three steps for creating and maintaining a successful SPM system, citing case studies to illustrate each point:
- Setting social performance objectives.
- Monitoring and assessing social performance.
- Using SPM and making it part of daily work.
The paper sets clear guidelines as the first step in establishing social performance objectives:
- Laying down clear and realistic performance objectives;
- Clarifying how specific activities achieve the desired social objectives;
- Identifying indicators to assess whether the goals have been achieved.
It presents a detailed methodology to assess the performance of the system through monitoring and analysis. There are two components to this:
- Routine monitoring;
- Research.
It also illustrates various ways of integrating the SPM system into the daily functioning of an MFI, and stresses the need for incorporating SPM into the MFI's organization structure and daily work. The article puts forward a strong case for the implementation of an SPM system by MFIs to improve their effectiveness in achieving their social objectives.
