Paper
Performance Measures for Microenterprise in the United States
A framework using the MicroTest philosophy, process, and system of measures as a base
The authors describe the MicroTest model which has the following salient features:
- It has a practitioner-led steering committee;
- Members use data as a decision-making tool;
- Testing and debating is used to measure an entire field, thus creating a structure for identifying and debating potential best practices and for defining success across the field;
- With 13 programs in 1997, MicroTest now has 54 Practitioner Member agencies.
The key categories of the proposed framework are:
- Reaching target groups: low income and women and minority clients;
- Scale: Number of clients/borrowers, businesses;
- Program services: all loans, equity products, or savings products that are used as microenterprise development tools; lending methodologies such as peer or individual; terms and conditions; and charge-off policies;
- Program services performance - loan delinquency and loss rates;
- Costs, efficiency, and sustainability;
- Institutional capacity and financial condition;
- Outcomes and impact.
The authors conclude by saying that there is a need of some level of standardization in performance assessment. They suggest:
- The proposed performance measurement framework can serve as a basis for defining a high quality microenterprise program;
- When developing standards, care must be taken to determine excellence among distinct strategies, targeted to different populations, and implemented in unique socioeconomic environments by a range of institutional types.
They further add that it is important to get familiar with the range of performance measures currently in use, their rationale, and their relative significance to overall performance assessment of microenterprise development.
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