Managing Social Performance in Microfinance: Building Successful Clients and Successful Institutions

Most microfinance institutions (MFIs) have a social mission. They may seek to reduce poverty, to reach people excluded from financial services, to empower women or to promote community solidarity. Social performance is the effective translation of an institution's social mission into practice; social performance management (SPM) helps an organization set and achieve its social goals by tracking social performance and using this information for decision-making that puts learning into practice. Social performance management is good both for clients and for business. It should be seen as a core part of good business practice. If MFIs know what the market 'wants' as well as the developmental 'needs' of their clients, they can improve services. This builds loyalty, reduces default and increases demand for savings, credit and other services. Social performance indicators warn about problems and provide social and financial information that helps influence future performance. Successful clients are the foundation of successful organisations