A Rough Guide to Microfinance Evaluation

The Latin-American microfinance industry has been recognized as one of the most developed and successful markets in the world, and today 10 Latin-American countries are included in the top 20 countries with the best environment for financial inclusion. But despite of progress, the region lags behind in terms of financial inclusion, compared to other countries and regions with similar levels of economic and social development, so Latin-American countries and international actors are rethinking their public policies and interventions both at national and regional level. The economic and social progress experienced by the region increased general expectations, but these objectives have not been fully accomplished. In this context, a key goal for national governments in is to empower productive structures to foster structural change, promote economic growth and reduce poverty and inequality, and microfinance plays a key role for the enhancement of public policies for financial inclusion. In this context, microfinance institutions aim to tackle some of households' needs in developing areas in Latin America. Microfinance institutions are a particular kind of financial institutions, because in addition to their financial objectives they usually pursue a set of social goals. This combination of financial and social aims represents the so-called double bottom line of microfinance. Microfinance was perceived as a socially responsible sector during the early years, but cases of mission drift, unexpected crises and evidences of overestimated positive program effects started a debate on how to understand microfinance effects and on how to improve evaluation methods. Several efforts aim to tackle this question and several international initiatives have contributed to promote more developed evaluation techniques and to standardize assessment methods. But despite of these efforts, to date there is no consensus about how these two orientations are interlinked and about the best method to evaluate microfinance performance as regards to financial and social objectives. In this paper we suggest a comprehensive approach that may be useful for researchers, practitioners, policy-makers and other stakeholders, as it explores existing viewpoints, research methods and practical tools. From the theoretical standpoint, we identify some key elements common to all evaluation studies and their key features. From the practical perspective, we have then identified three existing evaluation approaches (microfinance evaluation tools, sector-wide studies and impact evaluations) and explained their characteristics. This paper aims to contribute to find ways to improve evaluation methods, a key goal to design and implement better public policies for financial inclusion in Latin America and the Caribbean.
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Paper/Extenso Congresos GIGAPP
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Congreso GIGAPP
VIII Congreso Internacional en Gobierno, Administracion y Politicas Publicas
Madrid, España
Propuesta aceptada Ponencia/Comunicacion 2017-45 Estados de bienestar emergentes: nuevos retos en el análisis de políticas públicas