$2.7 Million for Social Performance Management

In their pursuit of profitability, many microfinance institutions (MFIs) have subordinated their original social objectives to financial imperatives. By designing their products and selecting their clients in ways that seek to minimize risk and maximize profits, they have achieved financial sustainability. In doing so, however, they have often excluded poor and marginalized people—precisely the segment of the population they were created to serve. In recent years, many MFIs have adopted social performance management (SPM) practices to renew their commitment to social impact and more effectively monitor progress toward their stated social goals.

Since 2006, CRS has been promoting SPM practices among Latin American MFIs with the support of the Ford Foundation. The initial MISION project worked through three MFI networks to create SPM resources, build the capacity of MFIs to implement SPM systems, and expand the use of SPM practices. Studies conducted following the pilot showed that the institutions involved developed a greater sense of ownership of and responsibility to their social mission, designed products to effectively reach and serve the target market identified in the mission, and improved client retention rates. The use of a network approach contributed to the success of this project. Thanks to its success, the Ford Foundation and the MasterCard Foundation invited CRS to submit a proposal to expand the successes of the MISION project to other countries in Latin America and to test a pilot in Africa.

That proposal met with success, and CRS has recently received a grant for $2.7 million from the MasterCard and Ford Foundations for the MISION II project. With this funding, CRS will use the tools and methodologies developed under the MISION project to take SPM to scale in Latin America. MISION II will work through 13 national and regional MFI networks in 12 Latin American countries to help more than 100 MFIs avert concerns of mission drift and contribute more effectively to the reduction of poverty and social exclusion through improved SPM practices. MISION II will also introduce SPM in Africa, initially through the Senegalese Microfinance network, then more broadly through a Steering Committee of stakeholders who will develop a strategic plan for further expansion throughout Africa.

For more information on this project contact Tom Shaw (tshaw@crs.org) or Jack Burga (jburga@crspe.org.pe).