Proposal for a Social Performance Measurement Framework in Microfinance: The Six Aspects of Outreach

This paper presents a conceptual framework for assessing the social performance of MFIs. It seeks to help MFI managements to measure and manage progress toward a double bottom-line consisting of financial and social return. The framework also helps donors and private investors assess the blended return of MFIs.

The paper explains the context and rationale for social performance management (SPM) and describes alternative SPM frameworks. It distills their key lessons and articulates criteria for selecting an SPM framework. The document also demonstrates how the six aspects of outreach framework satisfy these criteria and compares it to other SPM frameworks.

The paper addresses operationalization issues. It also presents the following reasons for the importance of SMP to microfinance:

• MFIs may drift away from their social mission without SPM;
• Without SPM information, MFIs have no basis on which to make strategic decisions that affect social outcomes;
• SPM increases industry transparency and credibility;
• SPM helps set industry social performance standards and benchmarks.