For example, the Small Enterprise Foundation in South Africa maintains that its client-level monitoring system allows it to better understand the reasons for client exit and thereby reduce drop-out rates. This contributed to a significant increase in its returns on investments and decreases in losses, over a three-year period since the monitoring system was introduced (Bauman 2004).
A microfinance meeting at the Small Enterprise Foundation in South Africa
Picture Coursey: Wikimedia Commons
Picture Coursey: Wikimedia Commons
A study on Prizma, in Bosnia, demonstrates that Prizma will be able to recoup the $40,000 in development and implementation costs for its social performance management system (including poverty monitoring, exit monitoring, and client focus group discussions) through retention of only an additional 2.2 percent of their clients. Given that Prizma is actually expecting to increase client retention by 10 percent to 25 percent, the social performance monitoring system will ultimately lead to significant financial returns (Woller 2004).
The move to assess social performance has generated some reservations: Do we really need a new set of reporting standards? Is it even possible to standardize measures of social performance? Will this end up as another cumbersome and costly donor mandate?
The move to assess social performance has generated some reservations: Do we really need a new set of reporting standards? Is it even possible to standardize measures of social performance? Will this end up as another cumbersome and costly donor mandate?
Opponents of social performance measurement cite high demand among the poor for services (and relative price insensitivity) as sufficient proof that microfinance services are socially useful and therefore additional assessments as unnecessary. High demand, however, does not automatically imply that people’s conditions are improving. In fact, spiralling indebtedness (where clients borrow to pay back other debts) can be one reason clients keep coming back. For most people working in the sector, providing financial services is not an end in itself. Access to microfinance matters because of the possibility it opens up to improve client lives.
From : CGAP Focus Note: Beyond Good Intentions: Measuring the Social Performance of Microfinance Institutions
To read more follow this Link: https://www.cgap.org/sites/default/files/CGAP-Focus-Note-Beyond-Good-Intentions-Measuring-the-Social-Performance-of-Microfinance-Institutions-May-2007.pdf
