Our Social Performance ratings provide an opinion on MFIs’ social performance, that is to say the systems and procedures implemented by MFIs to reach their social objectives. This social performance is measured and tracked as a proxy to social impact.
The Social Performance methodology was created in 2005 as a complementary and comprehensive tool to assess MFIs’ social performance and risk of mission drift. It was the result of several years of field work, research, and industry collaboration. Within the framework jointly defined by members of the Social Performance Task Force (SPTF), we developed a rigorous, independent and objective methodology, which is available to MFIs that wish to complement their institutional and financial rating in order to provide comprehensive information to their stakeholders (Boards, Management Team, Fund providers, Supervisory Bodies) for an optimal decision-making.
Assessment domains
We base our opinion on an analysis of internal processes, documents and socio-economic and sector national/regional data. For each of our five evaluation areas (described below) we evaluate the intentions, implementations and results:
Social Performance Management
We rate the intent to achieve the social mission, its institutionalization, organizational buy-in, the quality of performance measurement and tracking as well as the risk of mission drift.
Financial Inclusion
We rate the MFI capacity to reach the underserved (poor or excluded), and offer them an adapted range of services in an efficient manner.
Client Protection
We measure the MFI’s level of compliance with the six Client Protection Principles (as defined by the industry), whether the MFI has a responsible pricing and how it ensures ethical finance
Human Resources Policy
We evaluate labor conditions (through the professionalism of HR Management and its compliance with labor laws and ILO standards), the MFI’s compensation policy and whether staff benefits from equal rights.
Social Change
We evaluate how financial and non-financial services offered by the MFI may contribute to social change as defined in frameworks of reference such as the UN Charter, Human Rights and MDGs.
Our rating scale
A grade is assigned on a scale of 1-5, defined by the level of commitment and the social performance management systems in place:
5 - Advanced: Long-lasting commitment to social goals; efficient management of social performance and social responsibility risks; institution very likely to achieve its social goals.
4 - Convincing: Clear commitment to social goals; reasonable management of social performance and social responsibility risks; institution likely to achieve its social goals.
3 - In progress: Clear intent to reach social goals; social performance management systems being implemented.
2 - Incipient: Clear intent to reach social goals; low capacity to manage social performance.
1 - Intangible: Intention to reach social goals is non tangible ; low level of management of social performance.
0 - Negative: No intention to reach social goals; mismanagement leads to negative social performance.