Social performance

Old assumptions about microfinance are in question.  The apparent success in terms of growth in the number of clients with the expansion of profitable microfinance institutions and increased flow of funds, has been overshadowed by evidence of multiple borrowing, over-indebtedness of clients, and academic studies that question the effectiveness of microfinance – particularly microcredit – as a strategy to reduce poverty. 

Whilst effective financial management and financial performance remain important for sustainability, global initiatives in social performance are building a new perspective and set of tools and metrics that put clients (including the poor and the excluded) at the centre of microfinance. 

EDA has been directly involved in the evolution of social performance initiatives as a core member of the Imp-Act consortium, an early member of the Social Performance Task Force, and through association with M-CRIL in pioneering social ratings and contributing to the development and assessment of the Client Protection Principles.

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