• Guidance and evaluation

Guidance and evaluation

This document presents a conceptual framework for assessing the social performance of microfinance institutions (MFIs). It provides background for a research programme whose aim is to develop a conceptual framework and a corresponding set of tools by which MFI management can measure and manage progress toward a double bottom-line consisting of financial and social returns.

The document:

• describes at length the context and rationale for social performance measurement (SPM), describes alternative SPM frameworks and distills their key lessons, and articulates criteria for selecting an SPM framework
• demonstrates how the Six Aspects of Outreach framework satisfies these criteria and why it is preferable to other SPM frameworks
• briefly addresses operationalization issues.

The document concludes that:

• relying solely on financial performance measures gives a distorted view of social performance, which makes it difficult for MFIs to plan and achieve their social objectives
• information about social performance is necessary to increase industry transparency
• the Six Aspects of Outreach framework: creates a common language for understanding, discussing, and measuring social performance, integrates social performance measurement with financial performance measurement, and provides a conceptual framework for understanding how financial performance indicators contribute to social performance.

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