Investors, funders, governments, and donors spend billions of dollars each year on a wide variety of financial inclusion programs that are designed to improve the lives of poor people in developing economies. It is important to measure the impact of these initiatives to understand whether programs are helping people, who they have helped, and why they worked. Evaluating impact can help improve program design to achieve greater impact or highlight a program that should be discontinued.

There are several approaches to evaluate a program’s impact. The simplest method—program evaluation—involves analyzing a set of indicators to assess the client’s well-being before and after the intervention. However, program evaluation cannot determine causation, so changes observed may or may not be the result of the intervention. Other methods, including randomized control trials (RCTs) and quasi-experimental assessments, go beyond program evaluation to reveal a causal link between the intervention and changes in the well-being of people the program sought to help. RCTs and quasi-experimental impact assessments provide the most accurate data on impact, but they are complicated and expensive to conduct and are typically conducted by academics or those with specific training in impact assessment.

Man weaving, photo Wim Opmeer, CGPA Photo Contest 2013