Assessing the Impact of High-Quality Microfinance Programs
The Microfinance Plus Study (2019-2024) conducted by Opportunity International, aimed to assess the impact of high-quality microfinance programs on poverty in Uganda, Myanmar, and Paraguay. The study used an improved design, compared to past randomized controlled trials (RCTs) published in 2015, by incorporating a robust study design, assessing quality microfinance programs offering “plus” services such as training, and conducting research with strong partners. Despite substantial challenges to field interventions caused by the pandemic and subsequent economic recession, natural disasters, civil war, and/or control group taking up significant number of loans, the study was implemented successfully. And, it captured positive impacts – sometimes quite positive – on income and assets.
Key Conclusions. The following high-level conclusions emerged from the research:
- The critical 2015 RCTs can no longer be taken at face-value.
- Microfinance can have significant positive impact even in difficult contexts. In Myanmar, clients showed 40-52% income increase over the comparison group. In Paraguay, clients experienced a .087 standard deviation increase in assets over the comparison group – a significant, medium-level impact.
- However, contextual factors can become too severe to the point that positive impacts cannot be expected.
- Discussions of effectiveness going forward must address study design, actual operations, and context. We recommend that discussions focus on conditions/factors that make microfinance more, or less, impactful and how to address them.
- This study highlighted the importance of working with theories of change as practiced or practicable.
