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Citation Information

Type Journal Article - Small Enterprise Development
Title The cost-effectiveness of social performance assessment: the case of Prizma in Bosnia-Herzegovina
Volume 15
Issue 3
Publication (Day/Month/Year) 2004
Page numbers 41-51
URL http://www.ingentaconnect.com/content/itpub/sedv/2004/00000015/00000003/art00008
The microfinance institution, Prizma, targets poor women in Bosnia-Herzegovina. To monitor whether it was fulfilling its mandate Prizma developed three tools: a poverty scorecard, an exit monitoring system and market research focus group discussions. This article describes how the tools were developed and how much this process cost. It then goes on to discuss how possible improvements in client retention would affect the profitability of Prizma's joint enterprise loan, based on figures for average loan cycle profits. Reductions in the client drop-out rate of 50, 25 and 10 per cent are modelled, demonstrating that even modest improvements in client retention have substantial effects on profits, and easily cover the cost of the client assessment tools.

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