EDIAIS :Conference papers

This paper looks at the challenges of assessing and measuring the impact of microfinance on clients and the wider community. It argues for a broader perspective on impact, noting that microfinance may affect social dimensions that fall outside accepted, narrow definitions of poverty, and calling for assessments based on 'social performance' rather than 'poverty' alleviation or outreach. The paper notes that there is a need for organisations to be able to assess both their social performance - including their impact on poverty; and their financial performance - the degree to which they are sustainable and/or cost-effective. This dual concern is referred to as the 'double bottom line'. This assessment is useful both for external stakeholders who may be investing in microfinance, and for organisations who wish to know what impacts they are having, and how this can be improved in ways that meet client needs.

The challenge is to develop assessment systems that can reflect client needs and social and organisational context, while producing rigorous, comparable data for broader external analyses. The paper discusses a solution to this quandary in the shape of the Imp-Act social performance framework, which offers a preliminary means to systematically capture the various dimensions of poverty and of direct and indirect social impacts, while drawing on and reflecting local and organisational context. The paper briefly discusses the areas that such a framework would need to take into consideration, such as how information would be collected and reported in ways that are useful for clients and the organisation and for external audiences; how learning systems would be institutionalised; and how impact data could be digested and acted on in ways that benefit both organisation and clients.

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