Paper

Reviewing the Social Performance of Microfinance Institutions (Practice Note No. 8)

Are social performance reviews necessary?
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This paper discusses the different aspects of a social performance review. It provides information on how to conduct reviews to improve the quality of a social performance management system (SPM). It is divided into three sections.

The first section lists the reasons for conducting a social performance review, which are to:

  • Gather feedback on the microfinance institution's (MFI) SPM system;
  • Validate information about identified trends and discrepancies, and the resultant actions;
  • Ensure effective use of information;
  • Meet external as well as internal needs.

The second section lists the following questions that a review should ask:

  • What are the MFI's social performance objectives and how does it seek to achieve them?
  • How does the MFI monitor:
    • Who uses its services?
    • Why do some clients leave or become inactive?
    • What are the effects of its services on active clients?
  • How does the MFI use social performance information to improve its services?
  • How does it improve the systems through which it answers these questions?

The paper concludes with the third section, which lists the steps in designing a social performance review:

  • Involving the staff and the board;
  • Selecting and recruiting one or more independent reviewers;
  • Planning the review and drafting an initial report outline;
  • Organizing an initial meeting with senior staff and board members and interviewing junior staff and clients;
  • Analyzing data;
  • Analyzing and reporting the findings;
  • Producing a final report.

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