MICROCAPITAL STORY: Microfinance Information Exchange (MIX) Announces Release of the Social Performance Task Force’s (SPTF) Social Performance Indicators Survey

The Microfinance Information Exchange (MIX), the microfinance information clearinghouse, has sent a questionnaire to over 1,300 microfinance institutions (MFIs) throughout Asia, Eastern Europe, Africa and Latin America in an attempt to develop a standardized measurement of social performance. Designed to evaluate social performance, the survey consists of 22 core indicators covering topics such as client poverty level, progress out of poverty, product design, and institutional policies and procedures.

The topics chosen to be in the survey were the result of a collaboration between MIX and the Social Performance Task Force (SPTF). The SPTF was created in March 2005 by the Consultative Group to Assist the Poor (CGAP), the Argidius Foundation, and the Ford Foundation with the purpose of clearly defining social performance and addressing questions about measuring and managing social performance. Its members include various development agencies, government subsidiaries, non-profit foundations, and research and rating agencies. For a full list of over 200 members on the SPTF, please click here. Members include J.P. Morgan, the Gates Foundation, and Grameen Foundation. For an overview on what the SPTF has done since its creation in 2005, please read this MIX press release on the social indicators of MFI networks, covered by MicroCapital.

One of the obstacles in social performance measurement is that different measurements look at different aspects of an MFI’s activities, so there has been a lack of consensus on what factors best indicate social performance. Common measures of social performance used are include the CERISE Social Performance Indicators Initiative, SPA Tool, FINCA‘s Client Assessment Tool (FCAT), ACCION SOCIAL Tool, Planet Rating, CGAP-Grameen-Ford Progress out of Poverty Index (PPI), M-CRIL’s Social Rating, Microfinanza Social Rating. The organizations behind these different rating systems are all members of SPTF and are working to create a standardized measurement of social performance that can be used by everyone in the microfinance industry.

In the spring of 2008, MIX tested a set of social performance indicators designed by SPTF on a group of more than 100 MFIs. Based on their responses, the SPTF revised and re-organized the original set of questions into 22 core indicators. The task force tried to develop indicators that are conceptually clear, simple, practical, cost-effective, statistically rigorous, and comparable across countries, with an attempt to bridge the gap in microfinance reporting between institutional and client-level information. For more on reconciling the different social performance indicators used in the microfinance industry, please read this MicroCapital paper review on a paper entitled “Beyond Good Intentions: Measuring the Social Performance of Microfinance Institutions.” The revised questionnaire is now receiving general distribution via MIX in English, Spanish, and French. To download the survey in English or Spanish, please click here.

Since the survey was distributed in February and March, responses have been coming in steadily, but MIX and SPTF do stress that social performance management is new to the microfinance industry and the survey is still a work in progress.

SPTF will review all responses at its next meeting, which is scheduled for June in Madrid. At the meeting, the SPTF will continue with revisions of the questionnaire. Starting in Autumn of 2009, MIX will add the indicators to the MIX market data and will begin to weigh social performance reporting when determining the diamond ranking an MFI receives for transparency.

For more information, please contact Micol Pistelli at MIX (MPistelli@themix.org) or Laura Foose, Chair of the Social Performance Task Force (LFoose@alternative-credit.com).

By: Andrea Chu

ADDITIONAL RESOURCES

Microfinance Gateway, March 24, 2009: “MIX Announces Release of Social Performance Indicators”

The MIX Market, June 11, 2007: “MIX Participating in Social Performance Task Force”

MIX: “home“