One of the ways of gauging the social mission and vision of the MFI to the operations of the organization is called Social Performance Management.


Social performance is defined as “the effective translation of an institution’s mission into practice in line with accepted social values.” In other words, social performance is about making an organization’s social mission a reality, whatever that mission is (Source: Social Performance Task Force).

Social performance management (SPM) refers to the systems that organizations use to achieve their stated social goals and put customers at the center of strategy and operations. A provider’s social performance refers to its effectiveness in achieving its stated social goals and creating value for clients. If a provider has strong SPM practices, it is more likely to achieve strong social performance (Source: CGAP).

Universal standards for SPM

The universal standards for social performance management are a collection of good practices designed to help MFIs to optimise their social performance and to achieve their social goals. These standards have been created by the SPTF (Social Performance Task Force) thanks to the collaboration of a large number of microfinance professionals throughout the world. The SPTF has collected all of these universal standards in a manual which describes the standards (to be implemented by an MFI) and the fundamental management practices to be introduced in order to achieve these standards.

Smart Campaigns

The Smart Campaign is housed at ACCION International’s Centre for Financial Inclusion.

The Client Protection Principles are comprised of seven core principles which have been identified by the Smart Campaign and which should be adhered to in order to ensure that microfinance clients are dealt with in a responsible way:

  1. Appropriate product design and delivery
  2. Prevention of over-indebtedness
  3. Transparency
  4. Responsible pricing
  5. Fair and respectful treatment of clients
  6. Privacy of client data
  7. Mechanisms for complaint resolution

Each of these seven principles has been translated into standards to be adhered to in order to provide clients with the best possible level of protection. The Smart Campaign has defined a total of 30 client protection standards and these standards have been integrated within the SPTF Universal Standards.

The SPI4 tool assesses the implementation of the SPTF Universal Standards, which include the Smart Campaign’s 30 client protection standards.

Assessment tools on the Universal Standards

The SPI4 is a social performance assessment tool for microfinance institutions. An excel questionnaire, the SPI4 helps microfinance institutions evaluate their level of implementation of the Universal Standards for Social Performance Management, including the Smart Campaign Client Protection Principles. SPI4 also offers users with a specific mission focus—green, poverty, rural, gender—to assess their practices, thanks to optional indicators that reflect the latest industry thinking in these areas.

SPI is one of the most widely used social assessment tools. SPI has been developed by CERISE ( and its partners since 2001, with constant feedback from SPI users using an iterative, collaborative approach. Since 2003, more than 500 MFIs have used the SPI—updated regularly to include sector developments and user feedback—to help assess and improve their practices.

This current version includes a module to track the results using six dimensions to measure social performance.

Dimension 1: Define and monitor social goals

Achieving a social mission requires purposeful management, guided by a strategic plan. This strategy should include your mission, a definition of your target clients, a description of your social goals, targets and indicators to measure the achievement of those goals, and an explanation of how your institution will use products and services to achieve its social goals. Dimension 1 has two standards:

Standard 1a: The provider has a strategy to achieve its social goals.

Use the resources in this section to help you deconstruct your mission, define your target clients, clarify your social goals, targets, and indicators, and define how your institution will use products and services to achieve its social goals.

Standard 1b: The provider collects and discloses accurate client data specific to its social goals.

Use the resources listed in this section to help you collect the right information, ensure its quality, and use it for internal and external reporting.

Dimension 2: Ensure board, management, and employee commitment to social goals

Your board, management, and staff should be clear, committed and incentivized to achieve your social objectives. Dimension 2 has three standards:

Standard 2a: Members of the Board of Directors hold the provider accountable to its mission and social goals.

Your board should use social performance information to shape and adjust your institution’s strategy and hold the director to account for achieving social objectives. It should also protect the provider’s social focus in times of transformation and growth. Use these resources to learn more about turning commitment into action at board level.

Standard 2b: Senior management oversees implementation of the provider’s strategy for achieving its social goals.

Your board should be accountable for using social performance information to ensure your organization is on track to achieve its social objectives and treat clients in an ethical manner. The board should also be actively managing risks that your institution faces in relation to its social objectives.

Standard 2c: Employee recruitment and evaluation are based on both social and financial performance criteria.

From the moment they are hired, your institution should instil its values in new employees, and encourage these through routine training and balanced incentives. Use these resources to build commitment to your social objectives and responsible treatment of clients among staff.

Dimension 3: Design products and services that meet clients’ needs and preferences

Your institution should understand how financial and non-financial services fit into your clients’ lives and help them to achieve their financial goals, whether this is to smooth their income, invest in opportunities, or to create a safety net for emergencies. Once you have a clear picture of clients’ needs and preferences, design your intervention accordingly. Dimension 3 has two standards:

Standard 3a: The provider understands the needs and preferences of different types of clients

Listening to clients means understanding how the needs and product use of different client groups vary, how client satisfaction and exit varies by client group and the reasons behind these. Use these resources to build your listening skills and analytical acumen.

Standard 3b: The provider’s products, services, and delivery channels are designed to benefit clients, in line with the provider’s social goals.

Client-centred design means thinking through how to reduce barriers to financial access, as well as helping clients to cope with risk and emergencies and invest in opportunities. Use these resources to help your institution turn insights about clients into smart product design and effective delivery.

Dimension 4: Treat clients responsibly

Treating vulnerable clients in a responsible manner should be the bare minimum requirement for providers. This means protecting clients from over-indebtedness, treating clients fairly and respectfully, ensuring their privacy, resolving their complaints, and using transparent prices. Dimension 4 has five standards:

Standard 4a: Prevention of over-indebtedness

Avoiding over-indebtedness means aligning all steps in the credit process – from design, appraisal, monitoring, and reporting – to ensure that client debt does not exceed their capacity to repay.

Standard 4b: Transparency

Transparency means giving your clients the right information at the time and in the right way, so they can clearly understand and make informed decisions. This includes providing transparent information on product pricing, terms, and conditions. There should not be any hidden costs and charges that the clients are not aware of from the very start.

Standard 4c: Fair and respectful treatment of clients

Providers should define clear values around a fair and respectful treatment of clients, and enshrine these in policy and practice. Respect for vulnerable clients in especially important in the sales and collection processes. In one of the MFIs I worked in Southern Africa, clients’ protection is paramount. Alternative means of collecting from defaulting clients rather than the seizure of assets are ensured.

Standard 4d: Privacy of client data

Ensuring the privacy of clients’ data means having the right technological systems in place, and informing clients about their rights and responsibilities. Clients database should not be shared without the consent of the clients. In case photographs are used for promotion purposes, client’s consents must be sought.

Standard 4e: Mechanisms for complaint resolution

Financial service providers (FSPs) should value, encourage, and resolve client complaints in a swift, fair and transparent manner. Not only will this improve client trust, but provide a useful source of feedback about your products, services, and staff.

Dimension 5: Treat employees responsibly

Your staffs are your greatest asset for achieving your social objectives. Actively value your staff, make sure they’re clear on their roles and responsibilities, and listen to their ideas about how to improve your organization – and they will do excellent work for you. Dimension 5 has three standards:

Standard 5a: The provider follows a written human resources policy that protects employees and creates a supportive working environment.

Creating a supportive working environment means having the policies and procedures in place to guarantee that your institution is a non-discriminatory and safe place to work and that it remunerates staff appropriately and addresses their grievances. It also involves avoiding child labor. Also, provision of safe environment of work and ensuring that employees are protected from harm, harassment, and attacks in the course of their work is paramount

Standard 5b: The provider communicates to all employees the terms of their employment and provides training for essential job functions.

In order to do excellent work, staff needs clarity on their remit, training to achieve this successfully, and a fair and transparent system for evaluating and incentivizing their performance. Use these resources to guide your thinking about how to support staff.

Standard 5c: The provider monitors employee satisfaction and turnover.

A staff-focused organization will take regular steps to understand whether staffs are satisfied in their work, why they chose to leave your employment, and act when red flags arise in the course of this routine monitoring. Use these resources to strengthen your practice.

Dimension 6: Balance financial and social performance

As a social enterprise, your organization needs to balance both financial and social performance. This means thinking through what appropriate growth means in the context of delivering value to clients, making sure your shareholders share your vision, and pricing your services to deliver both qualities to clients and sustainability to the organization. Dimension 6 has four standards:

Standard 6a: The provider sets and monitors growth rates that promote both institutional sustainability and social goals.

Growth underpins financial sustainability, but overheated or irresponsible growth can signal a lack of focus on social performance issues. Use these resources to calibrate your institution’s relationship with growth.

Standard 6b: Equity investors, lenders, board, and management are aligned on the provider’s social goals and implement an appropriate financial structure in its mix of sources, terms, and desired returns.

For providers that take on debt and equity investors, aligning expectations around risk and return are crucial for maintaining a double bottom-line focus.

Standard 6c: The provider sets prices responsibly.

Your provider’s strategy around profits should balance both your long-term institutional sustainability and the well-being of those you seek to serve. Use these resources to start a conversation in your institution about getting the balance right. Interest rates, charges, and other fees should commensurate with the costs of providing the services plus an appropriate margin of profit. In many instances, MFIs without social performance standards do overcharge clients.

Standard 6d: The provider compensates senior managers in a way that is appropriate to a provider with stated social goals

What do your staff pay scales say about your institution’s priorities? Use these resources to get the balance right.


For microfinance institutions to achieve both returns to shareholders and at the same time serve their clients very well, the implementation of SPM is very important. Not only would such organizations succeed in the short-term profitability objectives, they shall also ensure the long-term sustainability of the organisations in general.

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