What does Oikocredit do to ensure it does not support MFIs with unacceptably high interest rates?

• Oikocredit evaluates and monitors the social performance of its loans over four areas:
  1.       selecting the right project partners
  2.       monitoring performance indicators
  3.       helping project partners monitor and assess their own social performance by providing technical assistance
  4.       supporting and initiating full impact assessments of selected project partners
• When selecting project partners, often MFIs, we ask them to provide us with the annual interest rate for their main financial product (or the product(s) which constitutes 30% of their portfolio). Using our network of partners and field staff, we are then able to compare the interest rates to the standard range of peer groups in the region. With this information, we can determine whether the interest rate is acceptable.
• Oikocredit is in the process of implementing a screening process for MFIs that includes an analysis of how they serve their clients (social scorecard). E.g. transparency of costs to clients, systematic client satisfaction, evaluation of client's ability to repay the loan.
• In 2008, Oikocredit began to use the Social Performance Indicators tool: an audit instrument much like a financial audit. It assesses the social performance of an organization by evaluating their intentions and actions, and shows whether a particular project partner is reaching the people it intends to reach and whether its procedures, products and services are in line with its mission.