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Altering micro-finance initiatives across the developing world to benefit poorer households

Our research project challenged the view that microfinance institutions (MFIs) could only assess their financial goals and not target social developments.

Women cooking in remote community
Our research demonstrates how MFIs can effectively monitor their social and financial impact

Microfinance institutions (MFIs) serve over 100 million clients world-wide. Microfinance - financial services for people excluded from mainstream banking - expanded rapidly during the 1990s into a global industry of specialist microfinance institutions. The dominant view was that directly assessing the achievement of social goals —such as poverty reduction and women’s empowerment—were unnecessary distractions from the commercial expansion of MFIs needed to reduce their financial dependence on aid.

Our research led by Professor James Copestake and Dr Susan Johnson successfully challenged this view by demonstrating that MFIs could effectively monitor their social as well as financial performance. The impact of this has been an increase globally in the number of MFIs doing so, the development of global standards for social performance assessment, and better quality financial services for millions of relatively poor clients.

Impact case study

This research was submitted to the Research Excellence Framework 2014.

Research impact

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