MICROCAPITAL WRAP-UP: Measuring Changes in Client Lives through Microfinance: Contributions of Different Approaches; By Mayada El-Zoghbi and Meritxell Martinez; Published by CGAP (Consultative Group to Assist the Poor)

This brief by Mayada El-Zoghbi and Meritxell Martinez of CGAP examines various approaches that are used in gauging the effect of microcredit on poor people. The authors cite the following evaluation methods used in microfinance: (1) qualitative evaluation methods, which may be in the form of interviews or focus groups; and (2) quantitative evaluation methods which may be quasi-experiments (not involving random placement of clients) or randomized controlled trials (RCTs) seeking evidence of causality between an intervention and impact on the lives of clients as compared to a control group. While the selection of the method should be based on the research question being considered, the authors argue that both qualitative methods and quasi-experiments are subject to biases. RCTs on the other hand, despite being costly to implement, are able to address selection bias and are more precise in evaluating causality. The brief states that microfinance historically has...

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