Assessing social impact is complicated, but not impossible. To evaluate social impact, we collect data on our partners’ outreach, targeting methodology, employment rates, sustainability, compliance with client protection principles, care for the environment and products and services offered.
Measuring social performance
Oikocredit works with partners to implement industry tools to monitor indicators of social performance. These tools include:
- the environment, social, governance scorecard
- the poverty probability index
- social performance indicators
Environmental, Social, Governance scorecards (ESG)
Oikocredit has developed two ESG scorecards which evaluate potential partners in relation to our key selection criteria: one for financial intermediaries and one for social enterprises. This is a key step in ensuring the right target groups are reached and that clients remain the top priority for our partners.
Poverty Probability Index (PPI)
The PPI is a 10-question survey tool which enables microfinance institutions to accurately select clients from their particular target group. If used over time, the tool can provide insight into whether a client’s economic situation has changed.
Oikocredit promotes the implementation of PPI among its partners to ensure they remain committed to serving disadvantaged people.
Social Performance Indicators (SPIs)
The SPIs are used as a social audit tool, similar to a financial audit. The tool focuses on process management, by examining an organization's stated objectives and the effectiveness of its systems for achieving them. SPIs analyze social performance using a wide range of indicators, covering four dimensions:
- targeting and outreach
- benefits to clients
- products and services
- social responsibility
By using SPIs, organizations are able to assess the quality of their processes. In addition, it engages internal dialogue which can prompt change.