Incofin IM as well as its investors attach great importance to the social components of the investments. We believe in microfinance as a means of providing people in developing countries with access to financial services (financial inclusion) and as a means to cope with the instabilities of life.
Incofin IM works towards a balanced combination of financial and social performance. We only invest in selected MFIs which actually make a difference in terms of their clients’ and staff’s standard of living.
We developed ECHOS© to measure the social performance of our investments (i.e. putting a company’s social mission into practice). ECHOS© is a measuring tool that scores the social performance of MFIs. Since we believe that our evaluation methods should always be in line with sector initiatives, this tool has recently been updated for the third time. ECHOS© calculates the score of an MFI by using a questionnaire which focuses on its social performance in five dimensions:
- The extent to which an MFI puts its social objectives into practice
- Its outreach and contribution to society
- Level and quality of the service provided and respect for the Client Protection Principles
- Human resources
- Respect for the environment and implementation of the principles concerning Corporate Social Responsibility
The ECHOS© questionnaire is completed by one of our investment managers during an on-site audit and has been applied to all of the MFIs in the Incofin IM portfolio. Only MFIs that score above 50% are eligible for funding.
Incofin IM also conducts studies on social performance. David Dewez, Regional Director Latin America & the Caribbean at Incofin IM, and Sandra Neissa, statistics consulting specialist in microfinance, analyzed the correlation between financial and social performance. This study was carried out in collaboration with Cerise, a French microfinancing platform and with the financial support of the BRS Foundation. It was published and can be downloaded here.