New Cost-effective Impact Study
A new cost-effective impact study illustrates positive impact of microfinance. Income and savings have increased more significantly for clients than for non-clients, according to respondents.
Oxfam Novib and Triple Jump have joined forces to develop a robust, but affordable and scalable method to measure social impact of financial services to micro and small entrepreneurs. The approach has been tested with two microfinance institutions (MFIs) in Africa – Attadamoune (aka AMSSF) in Morocco and VisionFund (aka APED) in Ghana. In both cases, evidence was found that the services of these MFIs have had a positive impact on a number of livelihood indicators.
Oxfam Novib designed a cost-efficient pilot – with methodological support from Wageningen University – to measure impact by comparing the perception of change of a sample of clients with a control group. In both cases, a randomised sample of around 250 clients and 250 non-clients (the control group) were interviewed. Data was automatically uploaded from the survey app into a central database. Sampling and data analyses were done independently from the MFIs. Propensity score matching was used to ensure comparability of the client group with the control group.
The results are encouraging. For example, more clients have perceived an increase in income and savings, compared to the control group (composed of future clients). Other (indirect) impact domains included in the assessment are living standards, access to food, education and health social participation, education and health, where mixed impact was shown.
The potential use of this cost-efficient approach is positive, due to its scalability and low costs. It puts the end client at the forefront. It may help impact investors and financial institutions to improve investment strategies and sustain claims of social impact with evidence at reasonable costs. Based on the results, MFIs can define and implement follow–up actions to improve their products, or the MFI can start a more qualitative analysis to get a more in-depth understanding of the impact findings.