Methodology

This section contains useful descriptions and tools on several methods for measuring impact - including Lot Quality Assurance Sampling, food security surveys and client assessment in conflict- and disaster-affected areas.

The Challenges of Measuring Client Retention

In this very useful paper, Chuck Waterfield goes well beyond anything published so far, laying out the problems associated with retention measurement in microfinance institutions and offering a new formula for a theoretically sound indicator. Any MFI designing a new management information system (MIS) might well incorporate this formula into their software. Managers of such MFIs can probably read the main body of this paper without lingering over the explanatory discussion in the Annex. As the author points out, however, the existing systems of many MFIs cannot produce all the information needed for the client retention formula. Managers of such MFIs need a detailed grasp of the issues involved in measuring client retention in order to understand the limitations of their current systems and to design changes that will approximate a correct formula as closely as possible. For these managers, a careful reading of the details contained in the Annex is advised.

The Road to Client Assessment: Travel Tips

The purpose of this paper is to provide a client assessment checklist for MFIs that outlines: 1. Necessary preparations for conducting and institutionalizing client assessment activities. 2. Which stakeholders should be involved in the process. 3. The financial implications of conducting client assessment. 4. Potential trade-offs and pitfalls of the process that need to be recognized upfront. Essentially, the paper provides a roadmap for client assessment that can guide an MFI as it thinks through the opportunities offered by client assessment and prepares to undertake the process. Case studies from MFIs around the world are used to illustrate how the process works in practice.

Client Assessment in Conflict- and Disaster-Affected Environments: The Experience of Action Contre La Misère in Haiti

Armed conflicts and natural disasters are frequent occurrences in the developing countries where microfinance institutions (MFIs) operate. Working in conflict- or disaster-affected environments poses numerous challenges for MFIs, which threaten both their short-term survival and long-term sustainability. Action Contre La Misere (ACLAM), an MFI in Haiti, has had the “opportunity” to work simultaneously in both environments. ACLAM’s experience offers a useful perspective that can supplement existing literature on microfinance programs in these environments. Section 1 of this paper reviews the context in which ACLAM operates. Section 2 describes the impact of political violence and Hurricane Jeanne on the MFI’s clients and operations. Section 3 reviews the experience of other MFIs operating in conflict- and disaster-affected environments; Section 4 then examines ACLAM’s response to such an environment and relates it to that of other MFIs. Finally, the Conclusion offers a brief summary of ACLAM’s experience in the SEEP PLP in “Putting Client Assessment to Work,” followed by concluding remarks.

How Client Assessment is Making a Difference at CRECER

This case study highlights four key lessons learned from the client assessment program of the Crédito con Educación Rural (CRECER), a Microfinance Institution (MFI) that uses village-banking methodology in Bolivia. The primary lessons drawn from this case study are: 1. Institutionalizing a listening culture within an MFI has significant net benefits for both clients and the institution, including improved product and service delivery for clients and increased competitiveness for the MFI. 2. Conducting qualitative research using small sample sizes, while not traditionally considered “rigorous,” is, in fact, a very practical way to shed light on a variety of research questions. This methodology is quick and cost effective, enabling management to respond to clients as well as operational concerns in a timely manner. 3. Using MFI staff to collect and analyze client assessment data ensures that they “own” the results, as well as the implications of those results. 4. If MFI staff conduct client assessment research, they must be well trained in data collection methodologies. Despite the relatively simple research methodologies used by CRECER, training was still necessary. Poorly implemented research is unlikely to be of use to either the organization or the client.

Using Lot Quality Assurance Sampling for Progress Tracking: The Experience of CRECER’s Credit with Education program in Bolivia

A PowerPoint Presentation that documents the experience of Freedom from Hunger's Bolivian partner, Crédito con Educacion Rural's (CRECER) use of lot quality assurance sampling (LQAS) to track improvement in client knowledge and practice pertaining to the the education component.

Cost of Education in the Freedom from Hunger Version of Credit with Education

Freedom from Hunger and its partners have effectively demonstrated in Credit with Education that the same field agent can effectively deliver both credit and education at the same meetings of borrower groups. This minimizes the cost of integrating education with financial services for very poor women. This paper presents a detailed cost accounting analysis of the cost of education offered in the poverty-lending strategy, including the assumptions and calculations used to determine the proportion of total operating costs which can be attributed to the integration of education with financial services. The calculations show that the integration of education with group-based poverty lending constitutes only 4.7-10.0% of total operating costs. Integration does not have to materially delay achievement of financial sustainability, and it is believed to enhance implementation and impact manifold. Cost of Education in the Freedom from Hunger version of Credit with Education, by Ellen Vor der Bruegge, Johan E. Dickey and Christopher Dunford. Freedom from Hunger Research Paper No. 6 (1997. Updated September 1999) 7pp. (Copies available from Freedom from Hunger at no charge)