Guidelines for Impact Monitoring & Assessment in Microfinance Programmes

The purpose of these guidelines is to overcome some of the practical restrictions of impact measurement by focusing on management-oriented measurement systems that emphasize comprehensive evaluation and place impact monitoring (IM) and assessment within the larger framework of on-going organisational activities. The analysis will seek to provide responses to the question "How can we improve positive impact and promote transformation?" rather than "Was there any impact?" In this context, the following questions are also raised:

• Who are the programme clients?
• Are clients benefiting from participation in the programme?
• When does impact occur?
• What happened?

These guidelines have been formulated to:

• Offer relevant information that will help users make informed and effective decisions in order to design IM and IA suited to prevailing contextual factors and objectives;
• Build on and improve existing M&E procedures, and help users understand and appraise the impact of projects on human well-being (current M&E mainly focuses on performance indicators such as financial and institutional sustainability criteria);
• Measure the effectiveness of microfinance programmes according to key concepts in poverty reduction: strengthening physical, human and social capital; increasing the standard of living; improving access to and control over productive resources; and enhancing knowledge about and participation in individual rights and power;
• Help to design a less-costly, application-orientated M&E process that is con-text specific and with which it is possible to reach a high level of data reliability;
• Provide information for decision making, project design and mid-term corrections by proving impact (accountability) and improving intervention (project management);
• Help users avoid undesirable or negative programme impact;
• Identify various MFI stakeholders and make them more aware of their ownership;
• Help to indicate necessary changes in microfinance policies to ensure that effi-cient dissemination and transparency exist between the project, the MFI and the donor;
• Show donors the effectiveness of their input in response to their goal to alleviate poverty.