The “wider impacts” of microfinance interventions were identified from the outset of the Imp-Act programme as an explicit concern for a number of partner microfinance organisations (MFOs) as well as of interest to the development community at large.
In the context of the programme, both McGregor (2000) and Zohir and Matin (2002) have sought to elaborate what these wider impacts might be and how we might go about assessing them. However, their main focus has been on wider “economic” impacts, leaving social impacts less well specified. This article aims to address this gap. It analyses what we might mean by wider social impacts, what examples of such impacts we might expect as a result of microfinance interventions and the challenge that they present for impact assessment.
Any attempt to assess the impact of a development intervention should begin with a model of causeand-effect that underpins a particular intervention. It must understand the nature of the problem that gave rise to the intervention (cause), the strategies it adopted to address the problem (intervention), and what it was able to achieve (effects). In other words, its starting point should be the direct and intended outcomes of an intervention. However, there are valid grounds for arguing that it should not be confined to these. If the cause-and-effect model that informs an intervention does not fully capture the nature of the problem, it may ignore a number of unintended impacts, some positive, some not.
It is clearly important for an organisation’s internal learning processes that it is aware of the full range of changes associated with its efforts and uses these to improve its performance. Secondly, when organisations draw on development funds, impact assessment also has a “proving” function which goes beyond the immediate concerns of individual organisations to addressing the interests of the industry itself and of the development community as a whole. This function remains valid, even when the industry begins to seek new sources of capital beyond the donor community. As Tulchin (2002) argues, such efforts are likely to strike a responsive chord with the “socially responsible” sections of financial markets, but they will need to demonstrate developmental impact as well as financial sustainability.
This article comes from the IDS Bulletin 34.4 (2003) Part III: Wider Social Impacts: 10. Assessing the “Wider” Social Impacts of Microfinance Services: Concepts, Methods, Findings