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Wider Impacts of Microfinance Institutions: Issues and Concepts

Sajjad Zohir and Imran Matin

Article published in Journal of International Development
J. Int. Dev.16, 301–330 (2004)

The paper distinguishes between a ‘wider’ definition of wider impacts (which takes into account feed backs from impacts to institutional performance) and a ‘narrower’ definition,which does not. In respect of both definitions, the paper sets out a typology of the effects which need to be measured (cultural, economic, social and political) and of the levels at which each of these impacts needs to be assessed (local, regional and national). The purpose is not to set out a blueprint for specific studies but rather to offer a framework which may be useful for guiding the methodology of such studies.

Late 1990’s saw several undertakings on impact assessments; and the proponents of MC felt that lot more positive evidence could possibly be established by looking into wider impacts. The paper deals with methodological issues; and may be credited for cautioning with excesses in such endeavor.

Microfinance institutions do not operate in a vacuum—but as one player among many in the various landscapes in which it operates. It has impacts on these landscapes and is in turn impacted upon. The effects of its services on the users are realized through their manifold engagements with various economic and non-economic institutions. These engagements and impacts are iterative in nature having feedbacks involving adjustments, new arrangements and distributional consequences. Any exercise in the area of wider impacts needs to have this basic interactive framework in mind. This paper is essentially an attempt towards unpacking some of these interactive pathways with a view to suggesting a few indicative study designs that future research in this area can build upon.

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