The IRIS+ impact performance benchmarks are analytic tools that aggregate sector-specific impact results across investments, enabling investors to compare their impact performance to peers and to the Sustainable Development Goals (SDGs).

See all current benchmarks here.

The development of impact performance benchmarks represents a profound step forward in the industry’s impact infrastructure, with the potential to radically shift the way that capital is allocated and managed.

Ultimately, these benchmarks will allow investors to make informed decisions, drive deeper impact, and address the globe’s greatest social and environmental challenges. For example, investors may use the impact performance benchmarks to: 

• Inform portfolio construction
• Conduct rigorous due diligence
• Set impact targets
• Identify areas of underperformance and manage toward greater impact
• Communicate with LPs and other stakeholders 

IRIS+ Financial Services Impact Performance Benchmark

The IRIS+ financial services impact performance benchmark is the first in a series of benchmarks launched in IRIS+. This benchmark explores investment-level impact data across a set of key performance indicators to assess financial opportunity & resilience and inclusive economic development within the financial services sector. The benchmark offers a sample characteristics overview, performance summary, key performance indicator deep-dives, and the methodological approach.

• Benchmark Overview

   

  Summary of financial inclusion benchmark

  

  

  

  

   

  Notes: In cases where multiple investors have invested into the same company or when investments have reported multiple years of data, that company is counted only once among 'unique investments.

  See all current benchmarks here.

• Performance Summary

   

  Portfolio Overview

  

  

  

  

  

  

  See all current benchmarks here.

• Key Performance Indicators (Preview)

  Below is a preview of the key performance indicator (KPI) of "clients actively using responsible financial services." The full benchmark includes including six additional KPIs. All KPIs include additional information related to product / service features, market segmentation, investor contribution, and performance over time.

  Clients actively using responsible financial services

  Outcomes: Uptake of responsible financial services is linked to improved financial health and strengthened resilience, especially in the face of financial shocks among vulnerable populations.

  

   

  

• Additional Insights

   

  GIINsight: Enhancing gender equality through financial inclusion

  Investments into financial services can unlock access to opportunities and enhance resiliency in the face of financial crises. Many of these financial services can be used to enhance gender equality in a number of ways. This brief finds that financial inclusion investments with strong client protection mechanisms in place generate both intended and unintended gender-lens impacts and highlights emerging opportunities to leverage financial inclusion investments to advance gender equality.

  This brief features investment-level, annualized impact performance data contributed by investors to the IRIS+ financial inclusion impact performance benchmark to explore how investments in financial services are achieving impact results for women. The impact performance benchmark is a new, first-of-its-kind tool that enables investors to analyze their impact performance, and to compare their own impact results relative to their peers across the market and the UN Sustainable Development Goals (SDGs).

  Download the GIINSIGHT, “Enhancing gender equality through financial inclusion” here.

   

  GIINsight: Using non-financial support to increase financial inclusion

  Many investors provide tailored non-financial support, including technical assistance, to companies in order to enhance product development, improve service quality, expand client reach, and build the internal capacity of investees. This brief, Using non-financial support to increase financial inclusion, uncovers how investments providing non-financial support can deliver stronger impact results across three financial inclusion indicators. Findings [SS1] also reveals opportunities to increase the value-add of non-financial support in financial inclusion.

  This brief explores investment-level, annualized impact performance data contributed by investors to the IRIS+ financial inclusion impact performance benchmark. The impact performance benchmark is a new, first-of-its-kind tool that enables investors to analyze their impact performance, and to compare their own impact results relative to their peers across the market and the UN Sustainable Development Goals (SDGs).

  Download the GIINsight, "Using non-financial support to increase financial inclusion" below

• Methodology

  Sample

  Details on the benchmark's sample size and constitution can be found here. The GIIN will continue to expand the benchmark and welcomes investors to submit data for inclusion. If you would like to be represented, please submit your impact results for your financial inclusion investments here. Financial inclusion investments made with the intention to generate measurable social and/or environmental returns alongside a financial return and for which capital, engagement, or investment terms are used to positively influence targeted impact results have been included.

  Methodological approach

  The impact performance benchmark analytic approach aligns to COMPASS: The Methodology for Comparing and Assessing Impact. The GIIN team followed four steps to conduct standardized, comparable analysis on impact results across investments in financial inclusion, as follows:

  1. Define the decision needed: The GIIN seeks to enable investors to incorporate impact into the decision-making process, primarily as it relates to investment selection and management allowing investors to understand areas of underperformance and outperformance across investments within their financial inclusion portfolios.
  2. Collect standardized impact information: The GIIN collected information related to investment context, investee context, and impact results from investors focused on financial inclusion. The GIIN used the IRIS+ system for measuring, managing, and optimizing impact to ensure standardization across impact data. Additionally, the GIIN relied on third-party data sources, including Findex, the World Bank, and the ILO, and the UN Sustainable Development Goals to contextualize results relative to relevant social performance thresholds, thus assessing impact performance in relation to the global challenges investors seek to address.
  3. Conduct analysis: The GIIN assessed outcomes using the IRIS+ evidence base, and input from key stakeholders such as SPTF and CERISE, to map how financial inclusion output metrics link to outcomes within financial resilience and inclusive economic development, ultimately arriving at six distinct Key Performance Indicators (KPIs) presented in the benchmark. The GIIN subsequently normalized impact results by multiplying each impact result by the ratio of investment amount outstanding to enterprise value, to arrive at a comparable scale and understand investments' proportional impact (i.e., investment-weighted results). Where appropriate, the benchmark presents findings excluding outlier investments to ensure appropriate interpretation of the findings. To identify outliers, the GIIN team removed any data points outside the interquartile range (IQR) multiplied by 100 for various segments of data presented. This approach allows for more nuanced interpretations to best reflect the insight and impact results across the diverse sample included in the benchmark. The GIIN generated two analytic figures: Scale and Pace, where Scale refers to the absolute, year-on-year annualized change in impact result and Pace refers to the annual percent change in impact. Each analytic figure offers important nuance in understanding investment-level impact performance. At this time, data do not allow for analysis of impact Efficiency, or the amount of impact generated per dollar invested.
  4. Apply insights: The GIIN built the impact performance benchmark as a series of dashboards to provide insight into aggregate performance and deep dives across KPIs, offering investors the opportunity to compare their own impact investment performance to peer groups using dynamic filters and to the pace of change required to achieve relevant SDGs.

  Analytic figures presented in the benchmark

  Each KPI presented in the benchmark offers four impact performance figures to reflect nuanced angles of impact performance. Figures are calculated as follows:

  1. Investment-weighted figure: This reflects the normalized (i.e., investment-weighted) impact result associated with a tranche of investment capital as of the end of a given reporting year. Investment-weighted results are calculated by multiplying a point-in-time impact result by the normalization ratio (i.e., outstanding investment amount relative to the enterprise value of the investee). For example, if an investee has 10,000 active clients using responsible financial services in 2020 and the normalization ratio is 0.3 in 2020, the investment-weighted number of active clients would be 3,000 active clients for 2020.
  2. Scale of change (volume): This reflects the year-on-year volume of change in an impact result, based on unweighted impact results. For example, if an investee has 10,000 active clients in 2020 and 8,000 active clients in 2019, then the scale of change in volume would be 2,000 additional active clients each year.
  3. Pace of change (percent): This reflects the year-on-year percent change in an impact result. Scale of change as a percent is calculated using unweighted impact results, given the inherent nature of percentages. For example, if an investee has 10,000 active clients in 2020 and 8,000 active clients in 2019, then the scale of change as a percent would be 0.25, or a 25% year-on-year increase in active clients.

  Data availability and additional metrics

  As the benchmark grows, the GIIN commits to ongoing product refinements to ensure that analytics remain relevant, rigorous, credible, and useful. The benchmark presents information across KPIs for which sufficient data quantity and quality was made available. For each KPI, the benchmark indicates the share of the benchmark sample reporting on a given KPI, rationale for missing data, and respondents' confidence in the data submitted. However, there are several metrics for which data were unavailable in a sufficient quantity to enable meaningful analysis; these metrics will be added into the benchmark as and when data volume permits.

  The primary purpose of the impact performance benchmark is to enable investors to compare impact performance relative to peer groups and the pace of change needed to achieve financial inclusion globally. For this reason, the KPIs presented in the benchmark are relevant for comparative purposes. Naturally, investors will also rely on additional metrics for their own impact performance management internally. This can include interest rates, average loan size, and product affordability, among others — all of which are critical in assessing impact performance internally but are not suitable for aggregate comparisons given the context needed to appropriately interpret each. For a full suite of metrics that investors may track, please see the IRIS+ framework builder financial inclusion theme here. Additionally, investors may leverage qualitative insights and anecdotes to support and supplement quantitative impact analysis.

• Acknowledgements

  This benchmark was developed with significant guidance, participation, and leadership from the following Benchmark Design Team members:

  • BlueOrchard Finance
  • Chiratae Ventures
  • Community Investment Management (CIM)
  • Elevar Equity
  • Grassroots Capital Management
  • Incofin Investment Management
  • LeapFrog Investments
  • Local Initiatives Support Corporation (LISC)
  • Lok Capital
  • Nuveen, a TIAA Company
  • Quona Capital
  • Triodos Investment Management
  • Triple Jump

   

See all current benchmarks here. You can also submit your own data to get tailored benchmark analytics through IRIS+ here.