Measuring Transformation: Assessing and Improving the Impact of Microcredit

This African proverb speaks well to impact assessment—it may seem as intractable as trying to embrace the trunk of a baobab tree. Yet the combined efforts of many can let us accomplish a goal that seems impossible for one or two. At the 1999 Microcredit Summit Meeting of Councils in Abidjan, Ivory Coast, we went out on a limb and tried to heed this proverbial wisdom. We urged practitioners, donors, consultants and academics to stay focused on our ultimate goal—substantially reducing or eliminating poverty among our clients. We also issued a call to action, challenging practitioners to take the lead and develop impact assessment and monitoring systems that use internal feedback loops to integrate field knowledge into management decision-making. Using the analogy of a financial audit, we outlined the concept of an impact audit that: • Provides analysis of trends over time and produces results comparable with previous impact data; • Integrates data collection with the regular information system of an institution; • Utilizes internal staff with a limited role for external experts; and • Costs no more than what it costs to track and audit financial information. One year later, we are pleased with significant progress in the industry. The Microcredit Summit Campaign continues to emphasize the issue through the updating of our original paper and by giving the topic priority at regional meetings in Africa, Asia, and Latin America. We also celebrate the publishing of the SEEP-AIMS Draft Impact Assessment Manual funded by USAID2 , the full-scale implementation of the tools in the Philippines and Peru, and the recent training sessions offered in the US and Kenya. We applaud the Ford Foundation for joining this effort with a new three-year grant project to assist practitioners in achieving their impact assessment goals. And we laud the renewal of the SEEP Impact Working Group to promote peer-learning exchanges. Together these efforts demonstrate that, just as one individual can’t embrace a baobab tree, practitioners can’t create these systems alone. Donors, practitioners, academics and consultants each have important roles to play.

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