Guidelines for Impact Monitoring & Assessment in Microfinance ...

MONITORING & ASSESSMENT IN MICROFINANCE PROGRAMMES
SELECTION OF INDICATORS
Indicators are not universal. Consequently, we cannot determine which indicators
should be selected or how many indicators should be used to measure a given
result. The response to these questions depends on:
82
• The complexity of the result being measured;
• The level of resources available for monitoring impact; and,
• The amount of information needed to make reasonably-informed decisions.
We can, however, state that the quality of measurement is a major issue. Assuring
that the data collection process does not include inaccuracies will help assure the
overall quality of subsequent analyses.
In microfinance, the following types of indicators are generally used:
• Economic indicators that refer to income, expenditure, consumption,
investment and assets;
• Social indicators that refer to education, health, nutrition and risk reduction;
and,
• Socio-political indicators that refer to empowerment and client relations to
the wider environment.
Levels of Measurement
Levels of measurement describe the relationship between the values assigned to
the attributes of a variable. Knowing the level of measurement helps determine how
to interpret the data from a variable. When a measure is nominal, the numerical values
are short codes for longer names. Knowing the level of measurement also
determines what type of statistical analysis is appropriate on the values assigned. If
a measure is nominal, data values cannot be averaged and a statistical significance
test cannot be performed on the data.
There are typically four levels of measurement.
• Nominal measurement: a numeric value names an attribute uniquely. No
ordering of cases is implied.