Monitoring and Impact Evaluation

Fundamental to the success and sustainability of a project is understanding the impact of the activity, product or policy on those affected. Microfinance institutions extend financial products and services to previously unbanked individuals, low-income households and poor entrepreneurs. It is important to understand how the lives of clients are being impacted.

Effective impact evaluation benefits clients, institutions and the sector.

For Microfinance Institutions, verifying that products and services are having a positive impact on clients is good market research. Delivering financial services that impact positively on households and communities increases client wealth and loyalty. Maintaining a client base that has increased capacity to benefit from a wider range of products supports ongoing operational sustainability. 

Regulators, policy makers and donors are required to gather evidence based results to evaluate the extent that microfinance programs contribute to improved livelihoods and poverty reduction. Impact evaluation is required to demonstrate accountability, transparency and informed decision making on effective interventions that are cost effective and sustainable.