Social Impact Assessment of Microfinance Programmes - weman

indicators which are more difficult to measure and quantify – such as
‘empowerment’ – they are doubly cautious and suggest that one always needs to
be tentative in suggesting that they can ‘prove conclusively’, that such-and-such
poverty alleviation or microfinance institution, had a quantifiable impact on
members or recipients of an intervention.
• This Study is designed to establish plausible association between changes
identified and participation in the microfinance programme. However, it is
important to state that the observation, leave alone the quantification of impact, is
often difficult to capture and quantify.
• Studies have shown that impacts on enterprise profits may occur early and then
taper off within the first year or two of microfinance programme participation.
Other impacts, for example the accumulation of selected household assets, may
take as long as three to five years of microfinance programme participation to
happen. Other studies show 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).
• While the huge potential of microfinance is always acknowledged, studies on the
impact of microfinance conclude that it 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. Moreover, it is recognised that ‘impact’ takes some years to work
its way through into the lives of beneficiaries, and contradictory or ‘mixed’ results
are not uncommon.
• The methodology for this Study is based on the Difference-in-Difference
approach, which compares the difference between income for participants and
non-participants in treatment sites/locales, with the same difference in income in
control sites/locales. This is the best method for undertaking such an exercise and
better than taking one which focuses on programme participants and new/likely
participants – the Pipeline Approach – which has an in-built bias as many of the
new clients are already ‘sold’ on the issue of and efficacy of microfinance.
• Along with the quantitative questionnaire, the Study also included questions about
the perceptions of borrowers and non-borrowers in order to understand how they
see the impact of the intervention. In many cases, perceptions seems to be very
different from ‘hard data’ and ‘facts’. Since we use Mixed Methodology, we not
only capture the quantitative side through our questionnaire, but also include
extensive Focus Group Discussions with clients, borrowers, non-borrowers, those
who have left the programme – so-called ‘drop-outs’. We also conducted
substantial Institutional Reviews which are based on interviews and give yet
another dimension to the Study.
• The six MFIs chosen for the Study, with their characteristics were: Orangi
Charitable Trust (OCT), urban, Sindh, not simply concerned with poverty
alleviation, but also entrepreneurial and economic development, individual
lending; Sindh Agricultural and Forestry Coordination Organization (SAFWCO),
rural, Sindh, poverty alleviation and income earning focus; Kashf, Lahore, urban,
peri-urban, exclusively women, poverty alleviation, gender empowerment,
economic security; National Rural Support Programme (NRSP), the largest rural
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