Making Impact Assessment More Participatory: Ford Foundation Sponsored Development Finance Impact Assessment Planning Workshop

This paper examines the developmental effect of participatory impact assessment (PIA) on the work of microfinance institutions (MFIs). It defines the basic principles of PIA and further outlines the benefits accruing to the following stakeholders:

• Client voicing their needs, leading to more appropriate financial products;
• Staff - improved understanding of clients, resulting in making better loan decisions;
• Organization effective form of market research.

The paper also discusses common pitfalls and specific difficulties faced in the use of PIA:

• It involves substantial inputs in terms of time and resources;
• The skill sets of the staff need to be upgraded;
• Implementing PIA puts an additional responsibility on staff for gathering and analyzing information;
• The results derived from PIA are more subjective in nature and lacks rigor.

To overcome the problems associated with the application of PIA and make it more useful, the author outlines the basic approach in exercising the tools and techniques of PIA, namely:

• Be perceived by community participants as a means to address their questions and problems;
• Produce results which are credible enough to convince stakeholders;
• Reinforce community solidarity , co-operation and gender-sensitivities.

The paper concludes by outlining the need to pilot the application of PIA in MFIs in different contexts, and with different methodologies for further refinement and efficacy.