Overall, our numbers show that the first wave of growth in microfinance borrowing has come to an end and that the percentage of poorest people reached during that wave was less than originally projected. We need to start a new surge of growth if the Microcredit Summit Campaign is to reach its goal of seeing 100 million of the world’s poorest move out of extreme poverty and to meet its commitment to add 53 million clients from among the world’s poorest to the World Bank’s goal of universal financial access by 2020. This next wave will require a broader set of institutions, actors, strategies, and partnerships. In the following pages, we outline six pathways that can make appropriate financial and other services more available to those living in extreme poverty.
Our Data Collection Methods and Their Limitations
One of the core themes of the Microcredit Summit Campaign is “a positive, measurable impact.” In keeping with this value, we publish on an annual basis the progress made against our two goals. We believe that measuring and reporting on our progress helps our community see what is going right, what is going wrong, and where we can learn from each other.
The total numbers we report often get picked up by the press and others in the community as an approximation for the total number of microfinance clients in the world. We want to make clear how we collect these numbers, and what trade-offs we have made in the service of completeness, inclusiveness, rigor, and accuracy.
Each year, we send out a request to all the MFIs and networks in our database (over 3,700) to complete an Institutional Action Plan (IAP) that gives information on their clients and the types of products and services they offer. We follow up with emails and phone calls to get the surveys completed and returned to us. Once we receive an IAP, we send it to a third party verifier who knows the organization and can vouch for the numbers they report. We try to be as thorough as we can, but we know our process has significant gaps.
We report only clients with loans outstanding at the end of the year. Since we started with a focus on microcredit, our goals were based on numbers of microfinance borrowers. Over the years, we have added questions about savings and other financial services offered by MFIs, but we know that there is significant overlap between borrowers and savers. To be consistent with our goals and to avoid overcounting, we do not add the numbers of savers to the numbers of borrowers to get a total number of microfinance clients. Next year, we plan on revising our IAP form to get more information on savings, insurance, and payments to see if we can get this data in reportable form.
There is some double counting in the numbers we report. We report number of loans outstanding at the end of the year. If a client has loans from more than one institution, then that client gets reported more than once. We have no way of analyzing this data at the client level.
The number of MFIs that receive focused follow-up collection efforts has been decreasing. We send out the IAP forms to over 3,700 MFIs. Getting the IAPs returned often requires numerous reminders and phone calls. The number that we can follow up with in any one year depends on the amount of funding we have for this exercise, and that funding level has been going down. This year we focused on the 200 largest MFIs that represented 89 percent of total microfinance borrowers the previous year. In order to get a close approximation for total borrowers for those MFIs that do not send in an IAP, we include the numbers from the most recent IAP we received from them. This does create distortions in both directions. For growing MFIs, the numbers we include will be less than their current totals, while the opposite is true for MFIs that are decreasing their output or who have gone out of business.
This year, we added MIX data for the first time. Both the MIX and the Campaign collect data on total borrowers and the gender of those clients. We have received data from a larger number of MFIs over the years, but in some cases, the data in the MIX is more current than what we have. This year we looked closely at three countries where the MIX data was more current data than ours for a significant number of MFIs (India, Bangladesh, and the Philippines). In this year’s report, we used this data in our totals. Since the MIX does not uniformly collect data on the poorest, we had to estimate this number for the MFIs where we used MIX data. We used the country average for the percentage of total borrowers that were among the poorest from MFIs reporting to us in order to make this estimate. (In the case of India, we did not use the NABARD numbers to make this average calculation, since they are so large that they tend to distort any country averages.) Table 4 shows the numbers before and after including the data from the MIX.
Table 4: Figures Before and After Including MIX Data
(December 31, 1997—December 31, 2013)
*Calculated based on an average family of five.
^ We excluded smaller MFIs from the Campaign data whose combined outreach accounts for around 1 percent of the data for each of the three countries. This resulted in a net decrease of institutions reporting (892 Campaign MFIs subtracted and added 267 from the MIX).
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