Microfinance and Armed Conflict in Nepal: The Adverse Effects of the Insurgency on the Small Farmer Cooperatives Ltd. (SFCLs) (Working Paper No. 03)

This paper discusses different social performance indicators which microfinance institutions (MFIs) can make use of. The sub sections are:

Base principle upon which the proposal of indicators is built:

• A reduced number of indicators;
• Indicators that can be controlled by the MFIs;
• Operating indicators.

Assessment indicators for the pre-existing social capital and its evolution:

• Per-existing social capital;
• Evolution of social capital.

Assessment indicators for the MFI social performance:

• The poverty and exclusion from financial services:
  • Definition of poverty and operating application;
  • Exclusion /integration to the financial services access;
  • The significance of the poverty and exclusion to access the MFI and its financial products.

• Considerations on the social capital and solidarities of the clientele:
  • Nature of the social guarantees present at MFI clientele level;
  • Constitution of the groups of solidarity collateral;
  • Evolution of the groups of solidarity collateral;
  • Social guarantees versus material/financial guarantees;
  • Social pressure as a means of making easier the reimbursement of loans;
  • Where the social guarantees for the credit left behind due to difficulties in mobilization or effectiveness.
• Participation of the customers in the MFI management;
• Measurement of the social effects of the offered financial services;
• MFI policy to adapt the management modalities and the financial products to the traditions, to the culture and to the values of the clientele.

Source available to examine the quality of the answers to the indicators:

• The need for having objective sources to check the quality of answers;
• Examination based on the available texts of MFI;
• Examination based on polls, surveys or interviews;
• Other examination sources.