What is the Evidence of Microfinance Impact? A Review of Microfinance Impact Evaluations in Latin America and the Caribbean
This paper analyzes published evidence of microfinance impact in LAC over the years of 1999-2011, for the direct benefit of practitioners. It aims to summarize the most relevant findings of impact evaluations about microcredit, savings, and new technologies used by low-income people and microentrepreneurs in LAC. It also aims to identify knowledge gaps and insufficiently substantiated theories concerning the effectiveness of financial products, in order to guide future research and evaluations.
About twenty impact assessment studies were conducted with NGOs, specialized MFIs, and banks with microfinance programs. Types of financial products analyzed differed between institutions. Key findings include:
- Most studies found that microfinance products had positive effects across different levels of income, education, employment, and business performance;
- Some evaluations mentioned that the impact of non-financial products depended strongly on the quality and the appropriateness of the product offered;
- Without meeting high standards, MFIs may not be able to have a positive impact on their clients.
The paper concluded that the MFIs’ data and observations will be of higher quality if monitoring and evaluation are directly incorporated into programs from their earliest stages.
