Measuring the Impact of Microfinance: Our Perspective
This paper presents views of microfinance practitioners regarding the impact of microfinance on excluded communities around the world.
The MFIs featured in this paper have worked with clients, who are mostly women, in more than 40 countries over the last four decades. They observe that access to formal finance opens a world of opportunities to these clients and particularly empowers women. Microfinance enables the poor to generate incomes, safely accumulate assets through savings and reduce vulnerability to risk through microinsurance. The paper illustrates the impact of microfinance through first-hand narratives and videos of microentrepreneurs from various countries.
The real impact of microfinance is often not quantifiable. It lies in the ability of microfinance to create inclusive financial systems and societies. The paper lists seven distinct roles of microfinance in promoting financial inclusion. They are:
- Facilitating economic transactions;
- Allowing families to manage day-to-day resources;
- Enabling access to services that improve quality of life;
- Protecting against vulnerability;
- Enabling productivity-enhancing investments;
- Allowing the poor to leverage assets;
- Building independent and confident economic citizenship.
