Evaluating MFIs' Social Performance: A Measurement Tool

This note presents a simple, low cost and credible social performance measurement (SPM) tool.The tool includes three components, namely, the social performance scorecard, social audit and standardized social rating. The note describes these components and states that:

• Social performance scorecard proposes that social performance is determined by net social benefit which comprises customer value and social value;
• Customer and social value is determined by the extent and nature of outreach;
• Social audit assesses an MFI's internal processes and the extent to which they align its performance with its social mission;
• Standardized social rating indicates the likelihood that the MFI produces significant social impact, at the time of rating and in the future;
• Social rating and scorecard can be used to compare social performance across MFIs and contexts.

The note states that the three components of the tool can be used separately or in different combinations. Each component offers insights into different dimensions of social performance. The tool complements traditional impact assessments and monitoring of household-level outcome indicators.