Integrating SPM into Mainstream Microfinance Capacity Building

This series of guidance notes aims to help funders and support organizations to integrate a social approach into MFI training materials.

MFIs need to be more effective in fulfilling their social mission and broader social responsibilities alongside their financial objectives. For this, they need to integrate social performance management (SPM) into overall performance management. All organizational systems and operations need to be aligned to the MFI's social goals. In doing so, decision-making accounts for social goals such as inclusive and responsible financial services as well as more conventional financial goals such as maximum growth, return on assets, and minimum portfolio at risk.

The social performance pathway maps out a process that starts with setting goals and objectives towards clear social results such as reaching target markets, providing appropriate services and achieving change. The notes:

• Recognize that ongoing support to MFIs from funders and support organisations is critical to ensuring a balanced approach to performance management;
• Provide targeted guidance on critical issues and details on further resources;
• Present the social performance pathway alongside common management areas and recommend areas for the introduction of a social performance lens.