C4EDC4ED

Project Description

Background 

We have been selected by the International Labor Organization (ILO) to evaluate 16 microfinance innovations with respect to their social and financial impact. These microfinance interventions were implemented worldwide across Africa, Asia and Latin America as part of ILO’s Microfinance for Decent Work (MF4DW) scheme.

Lack of access to capital is an important factor that causes the poor to remain trapped in poverty. Microfinance institutions have been springing up as a result since the 1990s. They intend to provide the poorest with access to credit that will help them break out of the cycle of poverty. However, the existing evidence shows mixed results with regard to the social impacts of microfinance and credit products. Overall, more research and evaluation are needed to determine which product packages are most efficient in achieving a social impact.

Evaluation 

The microfinance interventions mostly consisted of new credit and insurance products to small entrepreneurs and households that were piloted in several countries. Some new products directly catered to small and medium enterprises (e.g. new leasing products), others to the informal entrepreneurs. While several interventions were in the form of new products, others featured training programs, for example on entrepreneurship, financial education, risk management, and workplace safety. Finally, two interventions focused on how to induce small informal firms to become formalized. The innovations took place in Burkina Faso, Cambodia, Honduras, India, Kyrgyzstan, Mali, Nigeria, Pakistan, Peru, the Philippines, Tajikistan, Uganda and Vietnam.