I. Set clear objectives and identify desired outcomes

Social performance objectives:

• Provide start‐up capital and strategic inputs to new microfinance institutions (MFIs) and accelerate the responsible growth of small, medium and large sized MFIs that reach underserved/ un-banked target markets
• Support scale up or creation of adjacent sectors that enable the provision of financial services to the poor
• Enable diversification of product offerings to low-income clients by providing MFIs and Enablers with appropriate risk capital and technical advice
• Deliver a responsible, competitive financial return to investors while working towards larger social objectives of equitable access to financial services and promotion of transparent and ethical business practices in invested entities

Desired outcomes:

II. Create a deliberate strategy to achieve social performance objectives

• Designate Social Performance Manager
• Integrate Social Performance Management into Investment Process

o Collect environmental and social performance data to measure baseline.
o Investment Memos include evaluation of social and environmental criteria for review by Investment Committee
o All final Investment Memos must be approved by Social Performance Manager.
o Social and environmental considerations will be included in term sheets, shareholders agreements, and/or side letters of new investments o Social and environmental performance indicators will be monitored over the course of the holding period

III. Monitor Social Performance Indicators

• Data collected on quarterly basis with updates on investees’ environmental and social performance activity
• Monitor and analyze self-reported data provided through industry initiatives (e.g., MIX, GIIRS) on an annual basis
• Collect Investment Managers’ views on investees’ environmental and social performance throughout the year, focusing on the following key areas:

o Governance, Management and Staff Commitment
o Processes and Systems o Products and Services
o Client Protection o Overall view of institution’s performance vis-à-vis peers

IV. Assess progress towards achieving objectives

• Internal assessment of progress toward social performance objectives conducted annually for each Portfolio Company based on monitoring input
• Third-party assessments of the social performance (e.g., M-CRIL, GIIRS) of each Portfolio Company and Funds are also being tested.

V. Use information to improve overall organizational performance

• Assessments used to set and refine objectives and desired outcomes for Portfolio Companies and Funds with goal to improve performance over time

VI. Report on progress towards social performance objectives

• Regular internal meetings are held to discuss progress toward social performance objectives, recognize/share best practices, and set corrective action if warranted
• Quarterly reports to investors highlight social performance activity over the quarter of the Funds and the individual Portfolio Companies
• An annual report assessing the performance of each Portfolio Company and each Fund will be provided to investors
• Data on social performance indicators will be shared through industry forums (e.g., MIX)