How to Measure Social Performance? The Challenge of the Double Bottom Line in Nepal

This paper argues that social performance measurement (SPM) helps Nepalese MFIs avoid mission drift and provides investors with information necessary for planning and decision making. It stresses that SPM is especially necessary for Nepalese MFIs, because they need to actively participate in social inclusion and prove their social impact in Nepal’s fragile political situation.

The paper describes SPM structuring within individual institutions and within the microfinance industry and elaborates on the application of international SPM systems and tools. It also presents case studies of SPM carried out in Nepal, stating that social performance research would help Nepalese MFIs achieve their social objectives in a sustainable way. The paper concludes by advising Nepalese MFIs to invest in MIS, design context-appropriate SPM tools and the dissemination of SPM results.