Paper

Driving Investment Decisions with Social Performance Information

How do fund managers use social performance data?
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Brief No.1 from the e-MFP Brief Series discusses how fund managers integrate responsible finance into their day-to-day operations. It offers a glimpse of the inner workings of some European fund managers. The Brief describes the tools that fund managers draw on to use the information they collect. It looks at their strategies for improving social performance among MFI partners. It explores how investment funds are leveraging social performance data to push the microfinance sector forward. Investors in microfinance are increasingly open to analyzing their own systems and strategies. Social performance data has become a core element in making investment decisions. Fund managers are using social performance information to:

  • Ensure that potential MFI partners share their objectives;
  • Drive decision-making in investment committees;
  • Identify technical assistance needs;
  • Encourage investees to manage their social performance;
  • Push for better practices;
  • Promote compliance with clients protection principles;
  • Initiate dialogue with partners on issues related to social performance management;
  • Draw conclusions about their portfolio, specific groups of institutions, and general trends in microfinance;
  • Invest in staff capacity to ensure that analysts are equipped to collect, interpret, and manage information.