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Social Performance Management in Microfinance: Practices, Results and Challenges in Sub-Saharan Africa

Microfinance has an intrinsic social mission: it is generally described as a system which makes it possible to provide financial services to those who are vulnerable and have very few resources, and it has been developed to fill a need and to position itself as an alternative solution to the traditional banking and financial services, which do not serve this customer segment which is considered to be too risky or not sufficiently profitable. Therefore, microfinance’s raison d’être is to meet with two objectives in terms of the results it hopes to achieve: first of all, a social objective by serving the categories of population which are excluded from the traditional systems, and a financial objective which will enable them to perform their mission on a sustainable basis.

However, the 2000s have been marked by several instances in which there has been a drift away from microfinance’s initial mission and it became necessary for the sector to define a framework of good practices in order to avoid a proliferation of these cases. More generally, whilst microfinance’s initial social objective has been clearly stated, it is not necessarily evident for the professionals in the sector how to identify the measures to implement to be able to achieve this objective, hence the need for this framework of good practices. Cerise created the SPI4 tool in 2014 to enable the practitioners to assess their practices and to see where they stand in relation to these standards and to the other actors in the sector. This is a social audit tool which is fully aligned with the SPTF’s Universal Standards for Social Performance Management and the Smart Campaign’s Client Protection Principles.

In 2018, ADA and Cerise joined forces to carry out a global study of this database in order to establish a general review of the social performance management of financial service providers throughout the world since the launch of the SPI4 tool. The aim of this  study is to shed light on the type of financial service providers which carry out a social performance audit, to identify the main strengths and weaknesses of these actors in terms of social performance management, and to analyse the potential complementarities of social and financial performances. Whilst the original study covers all of the audits submitted to Cerise, this document focuses exclusively on MFIs in the sub-Saharan Africa region. In this way, the objective is to encourage an increasing number of financial service providers to assess and to improve their practices and to provide information to the organisations which support them about their specific needs in terms of training, assessment and close support in relation to social performance management.

Sarah Corley
Sarah is Deputy Director at DFI and is responsible for developing the DFS profession and providing opportunities for capacity building outside of our online course provision. She has over 20 years of experience within the learning and capacity development within the development and health sector, and is passionate about being a catalyst for change.

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