Most investment consultants and advisors, fairly new entrants to the microfinance space, are in the early stages of learning about social performance. However, a handful of organizations have developed programs to help socially-oriented investors make more informed decisions. These advisory groups try to identify high impact investments for investors seeking both a social and a financial return.

Both individual and institutional clients should urge their investment consultants or advisors to identify investment managers or investment opportunities that are geared to or already have demonstrated strong social performance track records. Potential microfinance investments should have a clear focus on poverty outreach and outcomes. Advisors and consultants can help socially-conscious investors understand how social performance data gathered through the PPI reveal both short and long-term results. The use of short and long-term horizons can help investors set expectations about how their investments can contribute to poverty alleviation over time.

Questions to Ask

To help determine how advisors and consultants can best find microfinance funds or investment opportunities that deliver strong social and financial returns, investors can ask:

• How long has the advisor/consultant worked with microfinance investments?
• Are they familiar with social performance and the PPI?
• Do they have relationships with fund managers?
• Will they monitor both social and financial performance on an ongoing basis?

Through such questions, investors can gauge the advisor or consultant's knowledge in the area of microfinance and social performance.