Social Performance of Microfinance Institutions (MFIs): Does Existing Practice Imply a Social Objective?

This paper presents a review of social performance measurements for MFIs to achieve their goals. It furnishes the results of a study that examined 415 MFIs that have reported their performance in the Microfinance Information Exchange database in 2008 and 2009. The paper also reviews prior empirical studies and consultancy reports dealing with poverty alleviation to determine important social performance measurements for MFIs. Key findings include:

• Number of MFIs reporting social performance has increased by 72% from 2008 to 2009;
• Around 81% of the MFIs who reported social performance aim to reach low-income clients than the poor (61%) and very poor (32%);
• Almost 85% of the 415 MFIs target female borrowers showing their contribution to social development;
• Analysis has shown that 99% and 64% of observations support microenterprises and small enterprises respectively, rather than medium and large enterprises;
• About 86% of the sample has poverty reduction objectives when providing financial and non-financial products and services to clients;
• About 85% of the sample provide facilities to promote the growth of existing businesses and 78% aim to assist in employment generation;
• Around 31-35% of MFIs provide financial and non-financial products and services for adult education improvement, children's schooling, and health improvement.