Social Impact Assessment of Microfinance Programmes - weman

Ideally, baseline studies and panel data are recommended so that one can capture the
trend and secular impact of the intervention so that one can compare before-and after
scenarios. But, unfortunately, most MFIs or researchers do not have the luxury of having
such data and they have to make do with cross-sectional data captured at one point in
time.
The IA should be designed to establish plausible association between changes identified
and participation in the microfinance programme. Towards this end, quantitative and
qualitative studies should be based on a longitudinal design, if possible, to obtain more
reliable measures of change. If a longitudinal design is not possible, the quantitative
assessment should concentrate on variables for which recall data are easily obtainable and
generally reliable. It should employ a comparison group, preferably a quasi-experimental
design control group of micro-entrepreneurs, to provide a basis for associating change
with participation in the microfinance programme. In onetime studies it is essential that
information on changes over a designated timeframe be gathered; it is not valid to
compare the current status of clients with non-clients and claim that the better results
among clients are due to programme participation. Rather, one assesses trends or changes
over a period of time between clients and non-clients in order to make a case that the
differences identified between the two groups are a result of programme participation. A
quantitative assessment should have a sample size that is large enough to ensure effective
use of control variables, account for refusals and non-finds, and allow for invalid data
issues, but small enough to fit the budget. Here is where trade-offs are required between
the number of variables, margin of error, confidence interval, and budget. (Barnes and
Sebstad, 2000, p. 8)
Barnes and Sebstad (2000) make the important point, that ‘in choosing variables, it is
important to consider the timeframe required for impacts to manifest themselves.
Previous studies have shown that different variables show change at different times. For
example, impacts on enterprise profits may occur early and then taper off within the first
year or two of microfinance program participation. Other impacts, for example the
accumulation of selected household assets, may take as long as three to five years of
microfinance program participation to happen. One recent study concluded that social
impacts (such as changes in women’s mobility) are likely to take longer to occur than
economic impacts (such as changes in income). Attention to temporal issues in measuring
variables in impact assessments (either through longitudinal designs or through the use of
recall data) is important for ensuring valid findings’ (p 37, emphasis added).
This is a particularly important point from the point of view of our particular study when
we present our results in the following chapters, since many of the MFIs in Pakistan are
relatively new – three or four years of operations only – and ‘impact’ will be difficult to
observe, leave alone, measure and quantify. Moreover, Hermes and Lensink’s (2007)
critical survey on the impact of microfinance, conclude that ‘its is unclear whether
microfinance contributes to a reduction in poverty or is the most efficient method to
reduce poverty without additional measures in areas such as education, health and
infrastructure’(p. 462). While they acknowledge the huge potential of microfinance, they
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