Reviewing the Social Performance of Microfinance Institutions (Practice Note No. 8)

This paper discusses the different aspects of a social performance review. It provides information on how to conduct reviews to improve the quality of a social performance management system (SPM). It is divided into three sections.

The first section lists the reasons for conducting a social performance review, which are to:

• Gather feedback on the microfinance institution's (MFI) SPM system;
• Validate information about identified trends and discrepancies, and the resultant actions;
• Ensure effective use of information;
• Meet external as well as internal needs.

The second section lists the following questions that a review should ask:

• What are the MFI's social performance objectives and how does it seek to achieve them?
• How does the MFI monitor:
  • Who uses its services?
  • Why do some clients leave or become inactive?
  • What are the effects of its services on active clients?
• How does the MFI use social performance information to improve its services?
• How does it improve the systems through which it answers these questions?

The paper concludes with the third section, which lists the steps in designing a social performance review:

• Involving the staff and the board;
• Selecting and recruiting one or more independent reviewers;
• Planning the review and drafting an initial report outline;
• Organizing an initial meeting with senior staff and board members and interviewing junior staff and clients;
• Analyzing data;
• Analyzing and reporting the findings;
• Producing a final report.