Guest post on NextBillion:

The Double Bottom Line of Microfinance Must Become a Triplet: Why MFI performance measurement needs a gender lens

If the stated mission and goals of microfinance institutions (MFIs) are to be believed, then women are undoubtedly the face of microfinance.

Indeed, according to the Microfinance Information Exchange (MIX), most MFIs claim to target women (74 percent) and just over half declare women’s empowerment or gender equality as an objective. Nevertheless, gender has not been recognized as one of the pillars of MFI performance, unlike financial performance (sustainability and scale) and, more recently, social performance (serving low-income clients well).

We at Women’s World Banking strongly believe that there must be a balance between financial and social performance, and that in order to achieve either, the industry must take a good look at its clients. This is where gender comes in. Because microfinance clients are still predominantly women, all performance measurement must have a gender lens. Only by truly analyzing this client base can MFIs both build the business case for serving women, and ensure that they are serving these women well. This is why gender matters.

But defining a new pillar is not enough; the industry must also have a standard by which it can be held accountable. That’s why, in 2011, Women’s World Banking launched the Gender Performance Initiative (GPI) to establish a set of indicators that would enable MFIs to consider not only how many women they serve, but how they can enhance their understanding of these customers to tailor products, marketing strategies and delivery channels to meet women’s needs. The initiative was also intended to demonstrate the benefits of financial inclusion for women and their households, as well as promote gender diversity at the organizational level, as we know that gender-diverse institutions perform better.

Read the full post on NextBillion.