Measuring Transformation: Assessing and Improving the Impact of Microcredit

This article examines the need for good impact measurement tools and identifies elements of an ideal impact assessment while emphasizing its importance. It outlines some problems seen in measuring impacts:

• They do not pass academic scrutiny;
• Proper assessment costs too much money especially to carry out on a regular basis;
• The marketplace provides reasonable proxies for impact data and are used to justify expenditure that does not match market standards.

Ongoing monitoring can provide trend analysis over time with comparable results which cost as much as financial auditing and can be implemented by existing staff. This type of impact monitoring suggests a different paradigm, an impact audit as an internal tool of management. In a microcredit program with up to 10,000 clients, this might cost roughly US $10,000 - $20,000 for staff tracking systems and outside 'auditors' but should be paid off by efficiency in delivering finer impacts and client benefits

The article recommend, analyze and describe five assessment tools in detail:

• Integrated Learning System developed by Helzi Noponen, implemented by Friends of Women's World Banking, funded by the Ford Foundation;
• Client Monitoring System developed by MSI and implemented by Workers' Bank, Jamaica;
• Practitioner-Lead Impact Assessment developed by SEEP and implemented by ODEF/Honduras and Kafo Jiginew/Mali;
• Client Exit Survey developed by AIMS, based on Women's Opportunity Fund work and implemented by AGAPE/Colombia;
• Impact Assessment Study developed and implemented by the Family Development Fund, Egypt.

The article concludes with the challenges ahead:

• Practitioners will need to reclaim impact assessment as an essential tool of management;
• Donors will need to apply funds and expertise to this area;
• Consultants will have to develop expertise in applying and standardizing these tools;
• Academics will have to work to adapt tools in to monitoring systems and analyze data;
• Clients should not become just objects of study but users of the data generated.