The Consortium formed as a result of a three-year action research programme that looked at making impact assessment more useful for MFIs.
The industry context: pre-1999
Microfinance was regarded as an important poverty reduction strategy for developing countries, and understanding (and improving) its impact was seen as central to poverty alleviation. Historically, though, the emphasis on impact assessment stemmed from funders’ requirements rather than helping MFIs to improve their service to clients.
However, there was growing recognition of the need to develop impact assessment tools that were more useful for practitioners. The AIMS programme (Assessing the Impact of Microenterprise Services), sponsored by the United States Agency for International Development (USAID), redefined the impact assessment agenda, and successfully developed a range of lower-cost and credible impact assessment tools. But this still left the challenge of integrating impact assessment into MFIs’ learning and development processes, so that clients’ needs became central to their work.
To address this challenge, the Imp-Act action research programme aimed to improve and develop impact assessment systems that respond to the needs of the MFI, its clients, and other stakeholders, and in doing so, to improve the quality of microfinance services and their impact on poverty.
The Imp-Act action research programme
Phase I: 1999–2001
The Ford Foundation sponsored a project to develop a proposal to carry out an action research programme. The consultative process began in late 1999, when several hundred expressions of interest were received from MFIs around the world. Prospective partners were selected to ensure a balance of geographical spread, methodology, and organisational approach. A three-day planning workshop was held in June 2000, which reviewed the 'state of the art' in microfinance impact assessment, and gave an overview of the issues facing individual organisations and the industry as a whole.
Phase II: 2001–2004
Imp-Act began working with MFI partners to help them develop internal systems to give them the information they need to monitor progress towards their social and financial goals. We also sought to develop core principles on social performance in microfinance.
Overall, the programme helped to move the industry's focus away from impact assessment to understanding and managing the process by which an MFI can achieve these impacts – the process of social performance management. The programme’s findings were brought together in a set of Guidelines for Social Performance Management in Microfinance, as well as the two-volume book, Money with a Mission.
Training development phase (2005)
A small team of individuals from around the world developed a new approach to training and supporting MFIs to improve their social performance management. The aim was to transfer the knowledge and skills needed to design and implement an effective SPM system, and to support MFIs to use social performance information to balance the social and financial dimensions of their decision-making.
Formation of a consortium (2006 to date)
Building on these foundations, in 2006, seven organisations involved in developing the SPM training formed the Imp-Act Consortium, and launched a three-year project to scale up good practice social performance management within the microfinance industry. The Consortium now has 12 members, and focuses on advocacy, capacity building, and knowledge management. Read more about our work here >