Social Impact Assessment of Microfinance Programmes - weman

Conclusions
• We have looked at six microfinance institutions which are fairly (and in some
cases, radically) different from each other. Hence, the repeated warning about the
need to examine each MFI separately based on what it does, rather than to
compare the results and make statements that such-and-such MFI has the greatest
impact on its clients. Each microfinance institution has some sort of impact which
others may not have.
• All previous studies which have examined ‘impact’ of poverty alleviation
interventions – microfinance being one such important intervention – warn about
problems with data and methodology. This is why there have been so few impact
assessments of microfinance interventions, and the ones that have been
conducted, have all been criticised for some short-coming or the other. Perhaps
the main reason why impact assessment studies have been difficult, is that it takes
many years before impact can be observed and quantified, if at all, convincingly.
Clearly, on all counts, one has to be fairly cautious about reading impact
assessment studies, whether they show a positive effect, a negative effect, or no
effect, despite many years’ of intervention. It may still have to take some years
when the methodology improves to be able to actually capture impact.
• Although in some areas and sectors and with regard to some microfinance
institutions, one finds signs of positive ‘impact’, the single most important finding
from this Study is that the social and economic impact on the lives of those who
take credit, for the most part, is limited.
• We do not say that the impact of microfinance interventions is negative; what we
do say is that the impact from microfinance is ‘not positive enough’, and that we
are not in a position to state categorically, that microfinance has a positive impact.
We do find improvement in the lives of many borrowers, but this improvement is
not significant enough. This result may also mean that, perhaps, we need some
additional interventions, along with microfinance, to make a significant impact on
poverty.
• The greatest impact that we do find in most indicators, is amongst microfinance
institutions which have been providing credit for many years. This result, while
perhaps not unexpected, leads to questions about differences in management style
and structure being significant factors in suggesting impact, rather than just the
extended time spent with clients.
• The second observation from our survey relates to the greater impact observed on
account of loan size. A larger loan size – or at least a loan size above a minimum
– has a greater impact than does a small loan amount.
• Our results suggest that a longer relationship with microfinance and/or higher
amounts of credit, will have a greater impact, clearly not a very surprising or
unintuitive result.
• With the exception of only one MFI, all the MFIs state that they are in the
business of poverty alleviation. In their Mission and Vision statements, they all
state that their microfinance (and in the case of one MFI, its development-related
interventions) are all for the poor and that their clientele is also from the ‘poor’.
However, if an objective criterion for poverty is used, such as the Government of
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