The roof of the Risk Management Graduation Model represents the achievement of an MFI’s financial and social goals. It is essential to bear in mind that the responsibility for reaching these financial and social goal lies on the MFI’s board and senior management and is not part of the risk management function. Accordingly, an MFI’s performance should remain independent from its risk management function in terms of ownership of risk, responsibility, recommendations, and decision-making. Nevertheless, the risk management function should include financial and social performance indicators in its risk reporting to ensure that the board and senior management are conducting systematic monitoring, including monitoring for adherence to key financial and social goals within established risk limits.

With regard to financial and social goal reporting, the risk management function should include the following indicators:

1. Social Results – an MFI’s capacity to stay true to its social mission and attain its social goals
2. Profitability – an MFI’s capacity to maintain or increase its current level of capital adequacy and attract new investors and shareholders while achieving its social goals
3. Efficiency and Productivity – an MFI’s ability to achieve its goals in a cost-efficient manner.