Benchmarking and Performance Measurement
As the microfinance sector in Europe grows, the need for adequate information from MFIs has become a key issue. Recent surveys carried out in attempts to provide a picture of the sector in Europe show that, in addition to problems inherent to survey work, MFIs are often unable or unwilling to provide even what would be considered basic information about their performance. This is particularly the case with portfolio quality information. When provided, information is difficult to compare. One of the reasons is the diversity of the actors, with organisations of very different sizes and ranges of activities, another is that each organisation measures different things. Setting benchmarks would strongly contribute to driving up standards in the sector by helping MFIs make better decisions, as well as strengthening its credibility for advocacy work and drawing potential donors. Defining standardized indicators and convincing donors of using the same would also reduce MFI’s overburdening with reporting.
To tackle this challenge, EMN started a working group on performance measurement with a first meeting held on September 19th 2005, gathering 10 participants from 8 different organisations. The working group was subsequently included in the East-West exchanges programme with coordination taken over by the cdfa.
The working group decided as a first step to define a minimum set of 10 to 12 key indicators. The group shortlisted ratios among those recommended by international standards (CGAP, Accion, Woccu…). Financial and social indicators are currently being discussed and prioritized.
The issue was discussed during the dedicated workshop at the Barcelona Conference in October 2005 (download minutes).
Several workshops were also held on social performance at the Budapest Conference in June 2006 (Social Performance Management: Bringing Your Mission to Life).
The report "Benchmarks and performance measurement" (Working group 3 in the framework of the EU project “From Exclusion to Inclusion Through Microfinance: Learning From East to West and West to East” de MFC, REM et cdfa) can be downloaded here.
Documents
- Microfinance Europe, The EMN BI-ANNUAL MAGAZINE on MICROFINANCE in EUROPE, n°3 june 2008 (social performance) - download here
- MFC/EMN/cdfa (2007): From exclusion to inclusion through microfinance, Report 3 - Benchmarks and Performance Measurement - download (English)
- Ministry of European Integration & EU Phare Programme (2007): Benchmarking Microfinance in Romania - download (English)
- CERISE (2007): Réfléxions de l'Adie autour de ses actions et sa stratégie sociale - download (French)
- Adie (2008): Evaluation 2006 Impact de l'action de l'Adie - download (French)
- European Dialogue (2008): The Role of Investors in Promoting Social Performance in Microfinance, Luxembourg - download (English)
- Dayson, K., Vik P. e.a.(2008): Measuring Sustainability - UK CDFIs, Université de Salford, UK - download (English)
- Dayson K., Paterson B. e.a. (2008): Lloyds TSB CDFI Operational Sustainability Research Project - Final Technical Report, University of Salford, UK - download (English)
Useful links
Indicators
Social performance
Corporate members
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