Journal of Microfinance / ESR Review


To what extent is it possible for organizations to reflect honestly on their own performance, draw appropriate conclusions, and then act on them? For many microfinance organizations this is now a question of survival. This paper argues that formal impact assessment can assist in the transition from donor-controlled replication projects to autonomous and adaptable organizations--but it often fails to do so. Pitfalls include inadequate attention to methodological detail and to the links between impact assessment and wider aspects of organizational change. The paper starts by highlighting the complexity of the overall task to which impact assessment is expected to contribute. It then critically reviews methodological options--why do impact assessment, what indicators to use, how to collect data, how to analyze it, and who should be responsible for which tasks? It concludes that the key to success is the quality of the relationship between microfinance managers and impact assessment specialists. A prerequisite for this, in turn, is the transfer of greater responsibility for managing impact assessment from donor agencies to the leaders of microfinance organization themselves.


James Copestake is a lecturer in the Department for Economics and International Development at the University of Bath, England. He has experience with microfinance impact assessment work in India, Zambia, Kenya, Malawi, and Peru.



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Journal of Microfinance

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