Social performance management – Lessons from Ethiopia’s Specialized Financial and Promotional Institution

Social performance management – Lessons from Ethiopia’s Specialized Financial and Promotional Institution
N°39

For many years, microfinance actors believed that the success and sustainability of their industry should be measured in terms of the financial performance of microfinance institutions (MFIs). As microfinance was as a tool for reducing worldwide poverty, its social impact was considered a given. From 2001, a growing number of industry actors realised that if microfinance was to be an effective tool for improving the lives of poor people, MFIs and their partners should focus specifically on that goal.
In order to do so, social performance indicators and measurement tools needed to be developed to help MFIs, MFI networks and investors rethink their approach to microfinance. Specialized Financial and Promotional Institution (SFPI)1, an SOS Faim MFI partner from Ethiopia that was keen to strengthen its social performance management, implemented two major tools: the Progress-out-of Poverty Index (PPI) devised by the Grameen Foundation and the Client Protection Principles (CPP) developed by the Smart Campaign.

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