An increasing number of startups across the globe are developing large-scale business models that offer tech products and services applied to the financial sector with the intention of improving the lives of different segments of the population. By democratizing access to capital, empowering marginalized sectors of society through financial education, creating mobile payment systems for those excluded from the banking circuit, or creating P2P financing channels to promote financial inclusion amongst students, the Social FinTech sector is demonstrating, as previously done in other sectors, that social impact and financial returns can go hand in hand.
At socialfintech.org, we believe that in order for the growth of Social FinTech companies to be sustained, it is important that they measure social and economic indicators and present them in ways that allow for objective evaluation and comparability. In other words, Social FinTech startups should implement impact measurement in their business, defining social and financial performance indicators.
If you are a Social FinTech company and would like to measure your impact, we recommend following these 3 key steps:
- Define the social problem the company is addressing, ensuring that it is tangible and clearly defined.
- Analyze the proposed social solution and evaluate whether it is solving the problem in a more effective or efficient way than what is currently available in the market.
- Establish two to three objective and measurable social metrics and revise them periodically in order to ensure that the company is achieving its intended impact. In order to ensure comparability between metrics of the different companies in the sector it is interesting to make sure that at least 1 indicator per company is compliant with the IRIS international standard of social impact metrics.
By James Tejera