Development of Social Performance Indicators: Update on SPTF Activities and Pilot

August 5, 2008

The Social Performance Task Force (SPTF) has created a standardized set of social performance indicators. These indicators measure the social performance of MFIs, enabling institutions to monitor and report the social outcomes of their operations in a way complementary to how MFIs already track their financial results through use of financial indicators. In this way, social indicators provide both the institutions themselves and potential investors with a more complete view of MFIs' performances.

The SPTF created a draft set of social performance indicators (see "Social Performance Indicators Pilot Test Survey") and ran them through a pilot test in the spring of 2008; participating institutions measured their results for each draft indicator and provided feedback on the measurement process. The two primary purposes of this exercise were for the SPTF and participating MFIs to gain a better understanding of the process of the gathering and inputting the requisite information, and for the SPTF to refine the current set of SP indicators into a finalized list. A secondary purpose of the pilot test was to promote eventual reporting of social performance data to the MIX.

Institutions participating in the pilot project were asked to rely not solely on information they had readily available, but also to gather data as needed in order to report a value for each draft SP indicator. For example, while institutions would be able to respond to indicators related to organizational structure, policies, and procedures with information already on hand, many organizations would have to conduct new research before they could respond to indicators involving client level data, particularly results indicators such as the measurement of depth of outreach. Funding for additional data collection was not available from the SPTF, but each institution had a contact person on the Social Performance Indicators Subcommittee who could offer guidance on statistically valid sampling methodologies and the choice of an appropriate poverty assessment tool.

After gathering data on SP indicators, institutions in the pilot process reported their results. Also, for each indicator, they noted whether they strongly agreed, agreed, disagreed, or strongly disagreed with each of the following four statements: 1) This data can be easily obtained; 2) This data can be easily verified; 3) This indicator is relevant to my institution; and 4) My institution is willing to publish the data of this indicator publicly on MIX. Each institution presented its results as a survey organized into the various subcategories outlined in the diagram below:

The SPTF analyzed the data from the pilot test to determine which indicators were the most appropriate, meaningful, practical, and reliable as measures of social performance. As part of this process, EDA Rural Systems interviewed pilot test participants and then wrote a qualitative report that discussed the lessons learned and suggested areas for future capacity building. To view this report, click here. To see a list of the specific questions that fall under each of the categories in the arrow diagram shown above, click here.