Originally, the microcredit movement was driven by inspiring stories. But donors and investors increasingly see the importance of measuring typical impacts as well. In order to credibly establish program impacts, having control groups is central, and the development of randomized controlled trials is moving methodological possibilities forward.

Too often, impact evaluations are seen as costly and backward-looking assessments of ongoing projects. But impact evaluations can be especially powerful and cost effective when viewed as investments in improving future allocations.

Key readings:

Banerjee, Abhijit, Esther Duflo, Rachael Glennerster, and Cynthia Kinnan. 2009. “The miracle of microfinance? Evidence from a randomized evaluation.” Abdul Latif Jameel Poverty Action Lab Working Paper.

Bauchet, Jonathan, and Aparna Dalal. 2009. “Randomized experiments in microfinance.” Microfinance Insights (12).

Goldberg, Nathanael, and Dean Karlan. 2006. “The impact of microfinance: A review of methodological issues.”

Goldberg, Nathanael, and Dean Karlan. 2008. “Impact of credit: How to measure impact, and improve operations too.”

Goldberg, Nathanael, Dean Karlan, and Jonathan Zinman. 2008. “Randomized trials for strategic innovation in retail finance.”

Karlan, Dean, and Jonathan Zinman. 2007. “Expanding credit access: Improving microfinance operations and measuring performance with credit scoring.” BASIS Brief (November).

Karlan, Dean, and Jonathan Zinman. 2009. “Expanding microenterprise credit access: Using randomized supply decisions to estimate the impacts in Manila.” Financial Access Initiative and Innovations in Innovations for Poverty Action Working Paper.

Morduch, Jonathan, and David Roodman. 2009. “The impact of microcredit on the poor in Bangladesh: Revisiting the evidence.” Financial Access Initiative and Center for Global Development Working Paper.