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A Systemic Approach in the Impact Measurement and Management

Publication Impact studies

The working paper was written between April and May 2020 by Microfinanza experts in the frame of the MEMI research project “Measuring Microfinance Impact in the EU. Policy Recommendations for Financial and Social Inclusion” funded by EIB University Research Sponsorship.

In this paper, the concepts of impact and impact assessment and management are introduced, outlining the differences between assessment and evaluation, and highlighting their growing importance in the international and European communities. In the second part, underlying reasons for undertaking this research are presented, introducing the methodology designed and adopted by Microfinanza which relies on indicators concerning the three dimensions, i.e. economic, social and environmental.

Thirdly, two case studies are presented in order to better explain and practically implement the theoretical framework prefaced in the first part. They are not real-life cases, but they do show how the set of indicators should be applied in two different scenarios. One represents its adoption by a Microfinance Institution (MFI), presenting the impact assessment on financial supply side which aims at understanding how financial institutions could apply this aspect into their daily work. The second one, which is an impact assessment of a financial education activity, displays how the set of indicators could be used for evaluating impact
assessment of specific activities.

Lastly, the importance of impact assessment and the future steps are outlined, underscoring the growing importance of this practice at different levels and for different stakeholders.