Effect of Microfinance Operations on Poor Rural Households and the Status of Women

Evaluating impact of microfinance projects

This impact evaluation assesses the extent to which Asian Development Bank (ADB) microfinance projects in developing member countries have reduced the poverty of rural poor households and improved socioeconomic status of women. The study examines five ADB projects in Bangladesh, Philippines, and Uzbekistan, using quantitative and qualitative tools. Findings indicate that:

  • Project outreach ranges from low-income to poor households;
  • Actual outreach does not match envisioned target group;
  • Projects had positive effects on the status of women;
  • Projects have mainstreamed improving womens status in their design and implementation;
  • Project design can be improved by including more gender disaggregated targets and indicators in the framework;
  • ADB could strengthen impacts by improving quality of client sub-projects, particularly among poorer clients;
  • ADB needs to further develop entrepreneurial capacity and skills of the poor to increase their ability to undertake and manage income-generating activities.

The study recommends that microfinance projects should be more focused in targeting poor households. ADB should consider building staff capacity in microfinance through training and use internationally accepted guidelines in designing its microfinance projects.