Measuring Changes in Client Lives through Microfinance : Contributions of Different Approaches

Abstract

In the past two years, the publication of three impact evaluations of microcredit programs in India, the Philippines, and Morocco precipitated a spate of press reports questioning the value of microcredit and whether it had positive outcomes for poor people (Karlan and Zinman 2009 and Duflo and Banerjee 2009 and 2010). The impact evaluations used randomized controlled trials (RCTs), an evaluation methodology that randomly assigns an intervention to a treatment group and withholds it from a control group. Widely used in medical trials and particularly in drug trials, the RCT approach is growing in popularity among academics and evaluation specialists alike in the social sciences. There are now more than 300 RCTs completed or ongoing in sectors such as education, health, governance, finance, and the private sector.