This Practice Note discusses how microfinance institutions (MFIs) can cost-effectively monitor and improve their social performance. By monitoring, we refer to regular, systematic and on-going collection of timely and appropriate information that helps the staff and clients of an organization to make decisions to improve the quality of their work. You probably already monitor your financial portfolio so that you can respond to problems and reduce risk. If you also monitor your success in meeting your social goals, this will help you to manage and improve your social performance, by revealing patterns and trends in who you reach and how they perform. This information allows you to track progress against objectives; to identify and respond to problems at an early stage; to see whether there are differences in performance for different client groups, different branches, products or staff; and to assess the risk and performance of different products and services. Together these contribute to improving the quality, efficiency and effectiveness of your work. Monitoring provides an overall picture of performance rather than an understanding of the reasons for the trends and patterns observed. It therefore does not take the place of more in-depth assessments of social performance, but it helps to guide and complement them.