Monitoring Social Impacts of Community Banks in Brazil

Two teams of researchers from the University of São Paulo Núcleo de Economia Solidária and the Columbia University School of International and Public Affairs constructed a set of indicators in order to measure the social impact and institutional performance of its affiliated community development banks in Brazil. Brazil’s community development banks, also known as CDBs, are unique community-based institutions operating on the principles of the solidarity economy that seek to enhance financial inclusion of low-income communities. CDBs provide a variety of financial services including microloans and banking correspondent services, manage local “social” currencies, and often provide capacity-building activities for small-type entrepreneurs. Since CDBs are not legally recognized institutions in Brazil, they currently function as programs associated with registered community organizations such as neighborhood associations, unions, churches or local councils.

In recognition of the unique mission and circumstances of Brazilian CDBs, it was neither possible nor desirable to simply adopt one pre-established set of indicators from another organization. Rather, best monitoring and evaluation practices were identified from among a wide range of organizations through a benchmark analysis. These practices contributed to the formulation of a new set of indicators designed to meet the needs of Brazilian CDBs. Thus, the indicators proposed by NESOL/SIPA were tailored to the mission of CDBs with emphasis on four primary axes – institutional performance, socioeconomic and financial inclusion, capabilities development, and social ownership.