Measuring social performance
Themes : Redefining wealth
A company’s financial performance can draw on the tried and tested tools so important to funders, but how is its social performance assessed? A number of funders are starting to look at the social added value of their investments, with the result that more socially responsible indicators are appearing every year.
The primary mission of microfinance institutions (MFI) is to fight poverty and social exclusion. Measuring social performance would seem intrinsic to this mission. However, the question arises of whether they play an effective role in this fight and whether the financial services they offer are suited to it. Social performance indicators are vital at a time when MFI are subject to a great many problems—including outstanding payments, bankruptcies and massive loss of interest by clients—and criticism. In seeking to make disadvantaged populations’ access to the basic financial services of savings and credit profitable by applying increasingly similar techniques and rules to those used in commercial finance, does not microfinance risk appearing as a segment of the international finance market targeting the destitute?
Solidarity finance sees microcredit and savings as tools to be used for human and social development. Its core activity therefore comprises strengthening social ties, adapting to the contexts and environments it operates in, structuring social capital and helping its clients to become autonomous. It is thus necessary to create indicators for identifying and placing value on the real work undertaken by solidarity finance, and translate its social mission into practical terms.
One case study
The SPI (Social Performance Indicators) initiative, now on its second phase, is testing the auditing tool developed in the first phase with selected MFIs in various parts of the world. The objectives of SPI Steering Committee in conducting this test are to check the accessibility, availability and reliability of the information provided, to define the questions precisely and to test the capacity of the tool to distinguish between different types of MFIs and different approaches to clients, in terms of social performances. One of those selected for an in-depth test of the social performance audit tool is Ahon Sa Hirap, Inc. (ASHI). ASHI engaged an external reviewer to administer the social performance audit. In the process, the external reviewer suggested adopting a participatory approach by involving the clients of ASHI in the external review. This report intends to describe this participatory approach to social performance assessment and to present the results of the experiment.
Mila M. Bunker, February 2005
4 Analyses/working papers/articles
Economie et Statistiques Working papers du STATEC N° 75
Günther Lorenz, 2008
Presentation of the second phase of the Social Performance Indicators Initiative, aimed at defining a tool for auditing the social performance of Microfinance Institutions (MFIs).
5 public contributions
Concept paper written for the WSSE Dakar, Senegal meeting (Nov 19-21, 2005).
Cécile Lapenu, October 2005
This questionnaire on social performance is meant to bring additional information to financial assessments and to give a wider vision of MFIs performances.
The operational guide is designed as a companion manual to help MFIs and external reviewers wanting to complete the Social Performance Indicators initiative (SPI) questionnaire.
Presentation on the Social Performance Indicators (SPI) made at the seminar: « Beyond growth worship: evaluation and indicators of real wealth » organized by Workgroup on Solidarity Socio-Economy (WSSE) Indicators workshop and AlterUqam, Quebec at the 2005 World Social Forum.
Benjamin R. Quiñones, Jr., January 2005
First draft of criteria and Indicators for social performance in solidarity finance
Yves Fournier, June 2003