85% of Microfinance Institutions & Majority of Microfinance Investors Say that MFIs Should Offer More than Financial Services
New Microfinance Insights Survey on social impact reveals new data on impact and performance measurement in microfinance from 160 microfinance institutions and investors globally
Tweet-- A new survey conducted by Microfinance Insights, the global print magazine, shows that 85% of microfinance institutions and 61% of microfinance investors believe that microfinance institutions should aim for wider social development beyond financial inclusion. The data comes at a time when many microfinance institutions are expanding quickly by offering more customers micro-credit. The results of the survey demonstrate that microfinance institutions, in their effort to fight global poverty, should offer additional solutions through the relationships they have established with clients.
Seventy-nine percent of MFIs polled offer products and services that are consciously seeking to create social impact beyond simple financial inclusion, including community development (63%), inclusion of minorities (60%), and better employment and labor conditions (53%). In addition, more than 83% of MFIs polled said that they are committed towards poverty alleviation as their primary goal, while 78% maintained their social objective is “women’s empowerment.”
Over the last few years, particularly with increasing commercialization, the microfinance sector has come under criticism for not bringing customers out of poverty, and that some organizations have “drifted” from their goal of impacting the lives of the poor – particularly women . To address this critique, many institutions have developed and implemented measurement metrics that seek to quantify impact.
Over 150 respondents were polled, including investors in microfinance. While the results reveal a firm commitment from both MFIs and investors towards creating social impact (47% percent of investors polled rated social return on investment as important as financial return), concerns remain over the process of measuring impact. The primary concerns among MFIs and investors were the associated time and cost structures. Sixty three percent of the investors polled said that an immature measurement framework is a major issue for impact assessment, followed by 60% who cited cost and time considerations.
Complete survey results can be found in the May/June 2009 issue of Microfinance Insights.
Other features of Vol. 12, Panacea or Placebo? Evaluating the Impact of Microfinance include:
· A Cover Story by Sam Daley-Harris, Director of the Microcredit Summit Campaign, who addresses the criticism of microfinanceA candid interview with Ela Bhatt, founder of SEWA, on the impact her organization has had on women over the last three decade
· A commentary on the future of social performance by Nigel Biggar and Jennifer Meehan from Grameen Foundation
· A report on the use of randomized trials in microfinance, by Jonathan Bauchet and Aparna Dalal from the Financial Access Initiative in New York
· A look at innovative housing finance solutions for urban India by the Monitor Group
· Alterfin on the challenges of duality – having a social impact and being financially sustainable
· Global perspectives on social performance and impact from Azerbaijan, Mexico, Sudan and the Philippines.
· And much more…
Microfinance Insights publishes on a bimonthly schedule, producing 6 issues a year. The magazine also has networks on Twitter, Facebook and LinkedIn, as well as a blog on the website www.microfinanceinsights.com.
Upcoming issues of the magazine include a focus on Private Equity in Microfinance in July/August 2009, and a closer look at the Profiles of Microfinance Borrowers in Sept/Oct 2009.
Notes to Editor
About Intellecap
Intellectual Capital Advisory (Intellecap) (www.intellecap.net) is a social business advisory firm that incubates innovative businesses, enables capacity building, and facilitates investment initiatives in the development sector. Working in direct design, execution, as well as indirect strategic advisory roles, Intellecap seeks to create unique solutions that efficiently and effectively address development problems.Intellecap recently launched a second magazine, Beyond Profit, which looks at the ideas, people and businesses in the social enterprise space.
About Microfinance Insights
Microfinance Insights (www.microfinanceinsights.com) is an international print magazine published by Intellecap to serve the knowledge needs of the growing microfinance sector. A comprehensive and consolidated resource, the magazine publishes diverse global voices, uncovers trends, and analyzes critical issues from economic, business, and social angles. By building knowledge and bringing in new international perspectives, particularly from developing countries, the magazine has become a microfinance thought leader. It is read by over 10,000 people around the world, who attend our knowledge-building events, and participate inglobal responsible finance, mobile finance, and microfinance conferences.