What is the Evidence of the Impact of Microfinance on the Well-being of Poor People? Systematic Review
Aug 2011, Duvendack, M., Palmer-Jones, R., Copestake, J. et al

Assessing the validity of existing microfinance impact evaluations

This review revisits evidence on microfinance evaluations, focusing on the technical challenges of conducting rigorous microfinance impact evaluations. It analyzes the validity of available evaluations, examining the intervention, measurement of outcomes and contextual factors likely to affect outcomes.

The study examines academic databases and bibliographies of literature. It classifies research designs used in microfinance impact evaluations into randomised control trials (RCTs), pipeline designs, natural experiments and general purpose surveys. Results indicate that:

• RCTs do not find convincing impacts on well-being;
• Pipeline studies allow only low validity impact estimates of change in outcome variables;
• There is a lack of robust evidence of positive impacts on women’s status;
• Well known studies which claim to have found positive impacts on females are based on weak research designs and problematic analyses.

The study demonstrates that microfinance impact evaluations have weak methodologies and inadequate data, which adversely affect their reliability. It recommends that the development community should understand the limitations of current evaluation techniques, so that more reliable evidence of impact can be provided in order to lead to better pro-poor outcomes.

The policy brief is available here.

http://www.microfinancegateway.org/p/site/m/template.rc/1.9.53236?cid=PSD_MFGatewayBulletinEN_W_EXT