Tracking Client Performance: Monitoring Systems for Social Performance Management

This practice note discusses how microfinance institutions (MFIs) can cost effectively monitor and improve their social performance. The paper states that it is important for an MFI to track client performance because it helps it to:

• Track progress against objectives;
• Identify and respond to problems at an early stage;
• Ascertain differences in performance for different client groups, branches, products and staff;
• Assess the performance of different products and services.

The first section of the paper explains how an MFI can use client monitoring data to understand the client's, as well its own, performance. It discusses the following three areas in which monitoring information can be useful:

• Tracking progress against targets;
• Making adjustments to improve performance;
• Installing early warning systems.

The second section guides an MFI through the steps of designing a suitable monitoring system:

• Clarify objectives;
• Review and build on existing information systems;
• Ensure simple and effective collection, analysis and reporting of monitoring information.

The third section provides a step-by-step guide on how to analyze and use monitoring information:

• Store and recall information;
• Monitor and use social performance information - this relates to tracking client performance indicators related to the MFI's social objectives;
• Use a management information system (MIS);
• Analyze patterns and trends in the portfolio that need further investigation;
• Examine the performance of different groups.

The paper concludes by identifying certain potential difficulties in this process.