1. Growth, Profitability, and Compensation: How Much is Too Much
Growth, Profitability, and Compensation: How Much is Too Much? (And is this the wrong question to be asking?) 2012 Social Performance Task Force Annual Meeting

2. Growth: not just growth, saturation
Standard: Growth rates are sustainable and appropriate for market conditions, allowing for high service quality.

3. Profits: high prices do not high profits make
The institution’s financing structure is appropriate to a double bottom line institution in its mix of sources, terms, and desired returns.
Pursuit of profits does not undermine the long-term sustainability of the institution or client well-being.

4. Compensation: what would disclosure tell us?
From Bateman, Sinkovic, Škare: “Bosnia’s Microfinance Meltdown”
From Mikrofin audits (2010)
The institution offers compensation to senior managers that is appropriate to a double bottom line institution.

5. Compensation: what would disclosure tell us?
The institution offers compensation to senior managers that is appropriate to a double bottom line institution.
2010 levels lowest to date

6. MIX Global and Project Partners
MIX partners with a dedicated group of industry leaders:

7. Appendix : Tradeoffs and synergies
Expected
Targeting very poor or poor
Non-financial services
Training on SP
Client retention
Social responsibility to clients
Social responsibility to staff
Productivity - -- ++ +
PAR > 30
Efficiency (Operating expense
Efficiency (Cost per borrower)
Actual
Targeting very poor or poor
Non-financial services
Training on SP
Client retention
Social responsibility to clients
Social responsibility to staff
Productivity +
PAR > 30 -
Efficiency (Operating expense
Efficiency (Cost per borrower)

8. Appendix: Growth and risk tied to investment flows

9. Appendix: Range of returns for MFIs (w/ and w/out SP data)

10. Appendix: Weak relationship between profits and yields
The institution’s financing structure is appropriate to a double bottom line institution in its mix of sources, terms, and desired returns.
Pursuit of profits does not undermine the long-term sustainability of the institution or client well-being.

11. Appendix: Profits and costs and impact
Research on microfinance and payday lending
“Restricting access to expensive credit harms consumers” (Zinman, 2008)
“Borderline loans [at 200% APR] objectively did more good than harm” (Karlan and Zinman, 2007)
“Payday lending enhances the welfare of communities” (Morse, 2007)
“Payday loans benefit some consumers and harm others” (Campbell, et al, 2010)
“Legislation restricting interest rates would be counter-productive for pro-poor providers.” (Portfolios of the Poor, 2009)
“Payday lending firms do not always make extraordinary profits…the call for regulation should be based solely in principle, moral, or other subjective reasoning—not on high fees.” (Huckstep, 2007)

12. Microfinance Information Exchange
Headquarters:
1901 Pennsylvania Ave., NW, Suite 307
Washington, D.C USA
Visit us on the Web: 
Contact us:
Interested in learning more about MIX?
Sign up to receive our free newsletters!
Find us on Facebook
Follow us on
Regional Offices:
Baku, Azerbaijan
44 J. Jabbarli st. Caspian Plaza I, 5th Floor,
Lima, Peru
Jirón León Velarde 333 Lince, Lima 14, Perú
Rabat, Morocco
Immeuble CDG Place Moulay Hassan
BP 408 Rabat Morocco
Hyderabad, India
Road #12, Landmark Building, 5th Floor,
Banjara Hills, Hyderabad , India