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How to measure Microfinance success?


It appears that there is no universal index to measure Microfinance success. Actually it is rather confusing for the new comer to understand whether Microfinance is just another banking exercise, one that relaxes risk considerations to provide the poor access to capital. But was Microfinance initially conceived for this purpose alone, or was it conceived as another way to advance human social capital no matter if financial objectives are met. As it stands today, there are as many philanthropic non-profit foundations as for-profit lending institutions working in this area. Certainly there is growing interest by financial institutions to enter this space, including investment funds, hedge funds, private funds, commercial banks, etc. These institutions have a clear profitable objective, but will it be in harmony with the utmost fundamental purpose of poverty eradication? So what will the the measure for success be? Financial returns, social returns, or both? And how do we quantify them? This interrogative is a very important question that many Microfinance practitioners are struggling to answer.

Note: This section was deliberately constructed to invite your comments, suggestions and critique

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