A Methodology for Assessment of the Impact of Microfinance on Empowerment and Vulnerability

This paper offers a broad framework to assess the impact of microfinance projects on the empowerment and vulnerability of the rural poor. It aims to enrich the criteria for International Fund for Agricultural Development's (IFAD's) interventions in microfinance in Asia and the Pacific region. The paper is based on a detailed survey of members of self help groups in six villages in Pune, India, where the IFAD supported Maharashtra Rural Credit Project was implemented. It identifies a few key indicators that impinge on aspects of social capital, empowerment of the poorest and self-insurance. The paper also proposes a selective list of indicators that could be adapted, refined and extended through systematic application. Conclusions include:

• Proposed framework can broaden the focus of impact assessment and be applied in diverse conditions;
• Framework would benefit from imaginative and creative application;
• Indicators need to be tailored for each specific context and application;
• Cross validation through a mix of quantitative and qualitative data and methods is vital for a robust assessment;
• Even small samples could yield valuable insights into the potential of microfinance for empowerment and economic security.