This volume introduces methodologies, in most cases developed by practitioners, which measure these wider or social impacts and use the. The social impact of microfinance takes place on different levels social impact can be categorised according to three levels. This workshop was organized in close cooperation with. Social impact assessment is a rapidly evolving practice.
They found that microcredit had mixed effects on business activities and little to no effect on womens empowerment or childrens education. The cases of fundacion paraguaya, idepro and fundacion genesis empresarial. Measuring economic, social and spiritual development in kabale, uganda by. As many mfis primarily exist in order to help the poorest people, one also has to include aspects of outreach in their performance. The multiplicity of channels means that it is typically impossible to assign a given measured impact to the strictly financial elements in microfinance. Social impact measurement is a process of understanding how much social change occurred and can be attributed to an organizations activities. It is very different from data collection, impact assessment and impact. In an attempt to address these issues, accion has developed a tool for measuring social performance called social, which includes the following six dimensions.
Assessing the impact of microfinance programming on children. Microfinance making a difference in afghanistan aug08 final. Contributions of different approaches may 2011 in the past two years, the publication of three impact evaluations of microcredit programs in india, the philippines, and morocco precipitated a spate of press reports questioning1 the. The social impact of microfinance and how to measure it. Impact measurement how to measure social impact sopact. Prove impact of microfinance important but impractical stage 2. Tanzania, is a clear indication that measuring both the financial and social performance is a major shortcoming in mfis. O1, i38, j16, q1,d7, c93 1 bill and melinda gates foundation 2 corresponding author. This study also begins to establish measurable indicators for spiritual development. In chapter 2, i use household level panel data from bangladesh to estimate the economic impact of microfinance by tracing the marginal effect of microcredit on household income.
Wright1 abstract when examining the income impacts of microfinance programmes, it is important to recognise that there is a significant difference between increasing income and reducing poverty. In chapter 2, i use household level panel data from bangladesh to estimate the economic impact of microfinance by tracing. Measuring the impact of the financial inclusion action. Memi measuring microfinance impact in the eu policy recommendations for financial and social inclusion task 9. In fact, while microcredit is increasingly advocated as an. However, using the method would add much more insight on the actual impact of microfinance. Measuring the impact of the financial inclusion action plan. Measuring the social performance of microfinance institutions.
Access to financial services enables clients to build and change their mix of assets. Comparison of the three ways to measure the impacts of microfinance. Pdf what is the impact of microfinance and how can it be measured. The subgroup has the mandate to develop a methodology for measuring the social impact of activities by social enterprises by the end of 20. Address for correspondence abigail powell centre for social impact a. A cross country analysis with special reference to india. Using a global dataset of 204 socially rated mfis from 58 countries, we assess the. Various authors have done work on social and economic impact assessments at the individual level. Microfinance as a poverty reduction toola critical assessment.
Microfinance as a poverty reduction toola critical. Analyze the effectiveness of microfinance, especially for increasing the level of income of the deprived people in society that would. Assessing the impact of microfinance programming on. Exploring the impact of microfinance in enlightening the excellence of life and economic development of the unfortunate communities. Quip is a methodology for qualitative impact evaluation. Measuring the impact of microfinance in hyderabad, india in a simple randomized control trial rct by the abdul latif jameel poverty action lab jpal, a large indian microfinance institution, spandana, identified 104 lowincome neighborhoods in hyderabad, india, which were potential locations to open a branch office. Social return on investment as a method to measure the impact of microfinance. As a result, no matter if your organization is just starting out or if its been around for over 30 years, chances are your impact assessment process if you have one lacks in consistency of both data and messaging. With the exception of brazil, there seem to be no real formal measurement of social. We then present impacts of the program on econom ic outcomes such as savings and economic livelihoods, as well as on social capital as captur ed by pro social behavi or in lab activities, social networks, and selfreported survey measures.
Existing impact analysis focuses on marginal outcomes to assess the effectiveness of microcredit programs. Analysis of the effects of microfinance on poverty reduction. Microfinance as a poverty reduction tool a critical assessment 3 thus, there is broad agreement about the need for complementary factors for microfinance to have some positive impact on. The integrity of the process is usually bolstered by an impact statement and a clear impactdriven, stakeholderfocused strategy. The impact of entrepreneurceos in microfinance institutions. Previous research done by tanya corrie in microfinance and the household economy 2010 has shown that. Measuring social impact in microfinance triple jump.
A conceptual framework of social impact assessment asad kamran ghalib institute for development policy and management idpm, university of manchester, oxford road, manchester, m 9pl, united kingdom asad. Critics argue that there is a mission drift away from the social mission, and this has motivated the introduction of social rating agencies to strengthen the business ethics of microfinance institutions mfis. Connolly c, georgouras m, hems l, measuring financial exclusion in australia, centre for social impact csi university of new south wales, 2012, for national australia bank. The microfinance ceo working group is especially pleased to be copublishing this document with its two members grameen foundation and accion for one simple reason. Results and recommendations from the africap social performance stakeholder. First and foremost, the access to microfinance usually leads to a higher and better diversified income situation, both at. Qualitative impact protocol for measuring impact of housing microfinance. Microfinance is also viewed as a complementary tool for enhancing economic development. Measuring the impact of microfinance on women empowerment. Our new outreach measures explain social performance better than those commonly used in prior research. A one percent increase in microfinance borrowers in a country leads to a usd 314 increase in. This report was prepared by laura budzyna and barbara magnoni of ea consultants. Measuring the impact of microfinance in hyderabad, india in a simple randomized control trial rct by the abdul latif jameel poverty action lab jpal, a large indian microfinance institution, spandana, identified 104 lowincome neighborhoods in hyderabad, india, which were potential locations to open a. We introduce new measures for breadth and depth of outreach.
Pdf the social impact of microfinance researchgate. Impact changes among clients, nonclients and communities imputable to mfi activities. Measuring changes in client lives through microfinance. International bodies namely cgap, unctad and others, development agencies, academic institutions etc. Evidence from a field experiment in cambodia radu ban,1 michael j. Indeed, the past decade has seen a growing interest in social impact of microfinance globally, and european mfis are dedicating increasing financial and human resources to measuring their social performance and impact. Measuring the impact of microfinance money conversations on. Social impact assessment social impact measurement. To assess the success or otherwise of their efforts, microfinance institutions mfis need to. The geces subgroup on social impact measurement was therefore set up in october 2012 to agree upon a european methodology which could be applied across the european social economy. Researchers evaluated the impact of increased access to microcredit on the economic and social wellbeing of women and their families in hyderabad, india. Finding an accurate measure of social impact is the holy grail. Microfinance programs target both economic and social poverty.
Charles vehorn, phd abstract microfinance is the practice of giving loans in small denominations to the poorest of the poor in developing countries. Social enterprises in the microfinance industry need to adhere to both financial and social demands. Pdf social return on investment measuring the impact. Measuring the impact of microfinance looking to the future. Process and baseline impact evaluation of the financial inclusion action plan fiap program 2018. Dec 02, 2009 how to measure microfinance s social impact. We further find support for the impact of microfinance on financial sector development captured by broad money circulation in an economy. The third university meets microfinance workshop on measuring the impact and social perfomance of microfinance took place at leibniz universitat hannover on the 17 th and 18 of june 2010. A trial study, is a big step in addressing this gap, especially what to measure and how to measure it. Measuring social performance is additionally complex given that the impact narratives of microfinance have also evolved over the years. Measuring social performance implies evaluation of principles, actions, outputs, some elements of outcome, and corrective measures impact measurement is too demanding, complicated, costly etc. The impact of social and financial performance measurements. As there is a connection between those and microfinance ashta, 2012 we will introduce social finance and impact investment and then demonstrate how social return on investment sroi analysis that is often used in this field could be used to measure the impact of microfinance as well.
Indeed, looking at the financial sustainability of an mfi only gives one feature of its performance. The whole discussion about the social impact of microfinance has just started. Using the social audit to assess the social performance of microfinance institutions forthcoming 15. Microfinance is generally seen as a way to fix credit markets and unleash the productive capacities of poor people dependent on selfemployment. New approaches to measure the social performance of. Measuring social performance in social enterprises. Measuring the impact of microfinance money conversations. Microfinance and the victorian government, a good money. In the final analysis, increased participation in the microfinance program has a significant impact on a clients social and spiritual development. Household level microcredit leads to an increase in household income. The microfinance sector grew quickly since the 1990s, paving the way for other forms of social enterprise and social investment. Measuring the impact of microfinance in hyderabad, india. The third university meets microfinance workshop on measuring the impact and social perfomance of. Measuring the impact and social performance of microfinance.