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You are in Direct - Inclusive Finance » PIIF Principle 6: Balanced returns
Strive for a balanced long-term social and financial risk-adjusted return that recognises the interests of clients, retail providers and investors.
The social performance of MFIs is assessed in the due diligence process through the non-financial scorecard. This assessment is an integrated part of the approval process (risk, return, impact). Furthermore, questions are addressed during the investment committee. Issues around social performance can result in the decision to disapprove an investment proposal or to adjust the financing terms (e.g. amount, tenor and/or covenants).
All portfolio MFIs are monitored on continuous basis. This monitoring process includes both the financial and the social performance of the MFIs. In addition, the Non-Financial Scorecard is monitored on annual basis. If a negative social performance is uncovered at one of the portfolio MFIs, this MFI will be engaged and requested to take measures to improve its performance. If no improvement is made this will influence the decision to refinance this MFI.
The key performance indicators (KPI's), which are used to assess and reward the performance of employees at ACTIAM are a combination of financial and non-financial criteria.
We collect social data from our MFIs through the non-financial scorecard. In addition, if our portfolio MFIs conduct additional research activities regarding the social outcomes of their work we request insight in this data. As well as trough MIX market reporting. We also request any outcome reporting from the MFIs invested in.
We publish an additional responsibility and impact report for our microfinance fund and our SME finance fund.
We encourage MFIs to track social data (based on MIX Market social performance indicators) in order to get to know their clients. We encourage data collection if the information can be used to improve processes and to develop new products based on clients' needs. MFIs are encouraged to implement appropriate MIS systems that enable the collection of social performance indicators together with financial indicators.