Social Impact Assessment of Microfinance Programmes - weman

Secondly, if staying power matters as the longer the microfinance institution stays with
its clients and the greater the likelihood of impact being observed and measured, an
institution should stay the course with its clients and develop their clientele over a longer
period of time.
Thirdly, linked with the time factor, is that of loan size. Perhaps MFIs should raise the
loan size for their clients sooner and more substantially so that the loan amount makes a
difference. Each MFI will have to work out the optimum ranges of loan size offered with
regard to particular and specific needs and requirements.
Since all MFIs state that they are intervening in the market to ‘alleviate poverty’, they
need to clearly state what those poverty criteria are. Whether they are following the
Official Poverty Line criteria, or whether they are developing their own criteria.
Whatever they do, they should state where their poor lie in terms of the poverty line, who
they are, and what determines the definition of the ‘poor’ for them. They need to assess
their own performance with these sets of criteria.
Many MFIs stated said that the inability to use the client deposits for further lending was
a problem. These MFIs do not actively promote savings as it is very expensive for
them, but there is a need to encourage them to promote savings, which, in turn, could
enhance impact, as savings were seen to be very important for sustainability and coping
with vulnerability. While it was not the Brief of this Study to look at microfinance policy,
given the importance of savings, one can suggest that regulations ought to be
reconsidered or amended, and licenses to on-lend savings be given, based on an MFI’s
performance and sustainability.
We did not find much impact on education or health, even though there is some impact
on income for older MFIs. This probably suggests that specific measures for these social
services need to be taken. The simple view that microfinance will sort out everything is
too simplistic; if these services are not available or of decent enough quality,
microfinance will not help very much. Maybe the MFI's could link-up with government
or other NGO programmes on these social issues and improve these services in their own
areas and for their clients.
Similarly, since on the Empowerment factor most results have been unimpressive, there
is a need for each MFI which claims that it also has Empowerment as an objective, to
evaluate its methodology of intervening on this count. Does microfinance automatically
translate to Empowerment Does it require special, separate, intervention How should
MFIs evaluate indicators of Empowerment
A Final Word
Impressionistically and anecdotally, we all know that microfinance ‘works’ and that it
makes a huge difference in the lives of borrowers; otherwise they would not continue to
come back for more loans. The fact that this does not show through in our results does
not mean that there is little impact. Given methodological issues, and the nature and form
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