Measuring social performance of micro-finance institutions

Concept paper written for the WSSE Dakar, Senegal meeting (Nov 19-21, 2005).

Cécile Lapenu, October 2005

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Summary :

In the face of the success of microcredit, presented by multilateral institutions such as the United Nations, the G8, the World Bank and the MFI as being a strategically important tool for development in the South, more and more voices are being raised decrying the perverse effects of such practices. The primary accusation is that they serve to embed financial practices that mimic and reinforce the processes of neo-liberal globalization. In such a context, several actors and institutions have reacted by reaffirming the importance of microfinance’s political and social objectives in terms of development and the sustainability of microfinance institutions (MFIs) themselves, as well as stressing the importance of emphasizing these aspects. Partisans of solidarity finance, they seek to prove that the construction of social ties and capital between local institutions and actors is not merely a factor in medium-term viability but is also a factor in the sustainable development of these populations.