As both an innovative financial instrument and a means of fighting poverty, microfinance has generated excitement and some $1 billion in annual investments. But as the industry’s reach expands, a number of questions have emerged:

• How can microfinance be used most effectively?
• How do we assess impact and measure success?
• How do we ensure it’s reaching and helping its intended clientele? 
• And most importantly, how do we ensure responsible practices in the face of expansion?

Part of the complexity stems from the dual goals of microfinance institutions (MFIs.) They must deliver returns on both financial investment and social change. And while established norms govern the financial side of the equation, there is no such discipline around measuring and reporting on social returns.

To help close this gap, we’ve joined a global consortium of microfinance donors working to establish and drive industrywide adoption of objective social performance indicators. This work will:

• Provide reliable, comparable, publicly available information on MFIs’ social performance
• Establish universal standards and benchmarks to protect against exploitative lending practices
• Establish a universal methodology for estimating household poverty levels  
• Provide actionable metrics to improve MFIs’ social impacts
• Increase access to capital at below market rates with extended terms