This research explores the progress of Social Performance Management (SPM), its approach to implementation, its measurable variables and its benefits to stakeholders.
Despite its popularity, very little is known about how microfinance can actually help the poor and improve their lives. The analysis of SPM reveals that:
Most social performance tools are suited to MFIs, and not to microfinance investment vehicles (MIVs);
Social performance tools must be developed for MIVs;
Most SPM tools for MIVs are developed and implemented in-house, suggesting the need for MIVs to take full control of their SPM to address their specific needs;
MIVs should adopt client protection principles in order to address investor concerns of over-indebtedness and lack of transparency;
MIVs should only use information that can be easily gathered and tabulated to draw simple, meaningful conclusions for social performance reporting.
The study shows that the diverse nature of MIV structure is not a hindrance to its success. If managed properly, MIVs based in Western Europe can monitor, control, measure and replicate successful initiatives across countries of their partner MFIs.