Social Bottom Line of Microfinance Institutions:Evidences from Rajasthan

Most of the Microfinance Institutions (MFIs) have a social mission. Social Performance or the social bottom line is about making an organisation's social mission a reality. Social Performance includes analysis of the declared objectives of institutions, the effectiveness of their systems and services in meeting these objectives, related outputs and success in effecting positive changes in the lives of clients. Social Performance Assessment (SPA) is a measure of how well an institution uses its systems and operations to generate positive social benefits. Using data from five MFIs selected from different legal categories, this paper attempts to measure social performance on the dimesions of depth of outreach, access and usage, and appropriateness of financial services. The study finds that with the introduction of Reserve Bank of India (RBI) guidelines post 2010 crisis and later modifications, the sector has witnessed several positive changes in terms of client satisfaction and protection. However, there are several violations of these guidelines in the field, requiring strict monitoring. RBI also has to make its guidelines more practical so that correct reporting is done in the field. Co-operative institutions should also be brought under the RBI regulation so as to give level playing field to all the institutions and protection to the poor.