M-CRIL has played a pioneering global role to develop a systematic methodology for social rating. This has been a significant step as part of M-CRIL’s commitment to support the microfinance sector, reflecting the social values associated with microfinance operations and investment, and providing a robust and relatively quick means to define and report on social performance.

Separate from, but linked to financial rating, social rating contributes to greater transparency on what microfinance is achieving in terms of the double (indeed triple) bottom line.
It covers:

• mission clarity
  
• alignment of strategy and operational systems to stated mission
  
• social responsibility: client protection, gender approach, responsibility to staff, communities and the environment
  
• outreach results: area analysis, client profile analysis
  
• quality of services: range of products, client awareness, retention and feedback.
  
  

A practical assessment, with a focus on the steps to achieving impact and social value, the social rating involves careful use of available country data (providing the context), interviews and discussions with the MFI’s board, management, staff and clients; and analysis of available MIS and relevant manuals and reports. The report presents findings on key questions of social performance – relevant to MFIs and discerning social investors or funders. It verifies information relevant to external social reporting, and can promote investment in MFIs with strong social performance. It serves to identify strengths and weaknesses in social performance, helping MFIs to think through their social goals and values and build appropriate systems better to support their double bottom line.

M-CRIL offers three types of social rating depending on the scope of the rating, with the key difference relating to coverage of field level information as evidence for social performance results in practice. The three types of social rating are outlined below.

Type of Rating	Coverage	Difference
Standard – Simple	Policies/systems & typical MIS (portfolio analysis)	Without field level data
Standard – Comprehensive	As above & field level results: - client profile - feedback on quality of services	Field level data available with the MFI
Enhanced – Comprehensive		Field level data collected as part of social rating exercise (Sample survey, Focus Groups with clients; involves MFI field staff)

For details of the social performance framework, and how different dimensions are covered in different types of social rating and methodology, click here.

M-CRIL recommends a Comprehensive Social rating, since this includes field level data as evidence of the extent to which an MFI is putting mission into practice - serving intended clients, providing quality services. Since few MFIs have field level data, M-CRIL recommends the Enhanced-Comprehensive Social Rating. We also offer the option of a ‘pre-rating’ or social performance assessment (ungraded) which is useful for MFIs who are still developing their approach to social performance management.

To encourage MFIs to undertake social rating or social performance assessment, funding support is available from ADA, Luxembourg

Sample social rating reports:

1. AMK Social Rating Report

2. BASIX Social Rating Report

3. SEF Social Rating Report