In recent years, important segments of the microfinance industry have demonstrated a renewed interest in and commitment to understanding how to effectively reach poor people, assess their level of poverty, and judge the performance of microfinance service providers.
However, for all of the public and, increasingly, private money that flows to microfinance, there are few models that provide guidance on reaching, and making a positive impact on the lives of poor people in a sustainable manner over an extended period of time. In fact, remarkably few microfinance organisations (MFOs) are capable of even demonstrating how many of their clients are poor and to what degree. As new tools for evaluation and market analysis suggest, failure to monitor and evaluate social outcomes can cut costs in the short term at the expense of achieving longterm social and economic objectives (Murdoch and Haley 2002: 6).
In Central and Eastern Europe and the Newly Independent States (CEE-NIS) – one of the youngest regions for microfinance – this picture is affirmed in the results of a recent survey undertaken on behalf of the SEEP Network. The results of the survey echo the state of the industry more broadly, with the majority of the 41 institutions responding that they do not have any holistic approach to poverty assessment. Nor do any use proxy indicators that provide reliable information on poverty outreach that would indicate to the institutions and their external stakeholders that they are reaching their mission-defined target group. In fact, only half of the organisations even attempt to measure the poverty level of their clients and those that do use only direct economic measures (MFC/SEEP 2003: 2–3). The survey indicates that practitioners themselves wish to identify indirect means to measure their clients’ poverty status in order to satisfy internal stakeholders and understand their depth of outreach. Commensurate with the need to measure clients’ poverty status is that of enhancing social performance, including depth and breadth of outreach and impact. This article outlines some steps that the MFO Prizma has taken to enhance and sustain social performance by institutionalising organisational learning and deepening outreach to the poor in the culturally specific context of Bosnia and Herzegovina.
This article comes from the IDS Bulletin 34.4 (2003) 3. Sustaining Social Performance: Institutionalising Organisational Learning and Poverty Outreach at Prizma, Bosnia and Herzegovina