Impact Analysis and Social Return on Investment
This paper discusses the social impacts of a Prisma loan and the various methods of measuring social return on investment. The paper identifies the following areas that are socially impacted by a Prisma loan:
- Human capital development;
- Community development;
- Corporate governance;
- Socially responsible market creation.
The paper identifies borrowing from a MFI like Prisma as one of the options used by 'unbankable' populations to generate investment capital. The paper concludes by outlining Prisma's quantitative and qualitative methodology for measuring social return on investment (SROI) as follows:
Current SROI analysis:
- Uses traditional cost/benefit benchmarks;
- If the ratio is greater than or equal to one, it considers the project worth pursuing.
Future SROI analysis: Prisma would quantify its SROI in terms of the increase in income derived directly from the loan.
Quantitative analysis: includes economic and social indicators.
- Economic indicators:
- A borrower's financial status, before, during and at the end of a loan;
- Information about a borrower's finances, professional activities, income, projected future income, etc.
- Social indicators:
- At the time of a loan, social indicators include age, gender, economic conditions, income, etc;
- During the term of the loan, social indicators include changes in the standard of living.