Earlier this year, we reported on the results of a new study on client outcomes, which showed how Opportunity’s microfinance clients benefit from increased income, improved household welfare and greater resilience.
This time, we’ll look at the future of this study, and how we hope this innovation in data collection and analysis will lead to improvements in our services, better outcomes across the microfinance sector and potentially a boost to the International Development agenda too.
In microfinance, particularly with the organisations we partner with, it’s a social mission. We want them to be sustainable and to be growing. Management guru Peter Drucker once said, “what gets measured, gets managed”. We might also say that what gets measured, gets improved. Since the publication of the 60 Decibels study, we have been discussing the results with our nine participating microfinance partners, and particularly focusing on areas where each partner exceeded or fell short of the averages for the study. Good performance is something to be celebrated.
As a top performer in the first year, our partner Cashpor will benefit from being able to publicise their above-average performance. At the same time, below-average results give insight into areas for improvement. For example, a couple of our partners found that fewer of their clients had a strong understanding of the terms and conditions of their loans than for the average organisation surveyed. We will be working with these partners to review their client training materials and processes to make improvements that will help client understanding.
The 60 Decibels study is the first to publish benchmarks for microfinance client outcomes and the hope is to improve these benchmarks in year 2 by doubling the number of microfinance institutions included – to around 150.
Opportunity will support 12 of our partners to participate in year 2 and we are also part of a working group to refine and improve the survey methodology and data analysis.
Prabhati, a sheep farmer in India, is one of the many clients whose lives have improved since taking out a small loan through one of Opportunity’s partners
Beyond the value we get from data on our own clients, we believe that this type of innovation in data –and in particular benchmarking of results –should lead to better allocation of funding to successful partners and programs across the microfinance sector, improving client outcomes. 60 Decibels plan to repeat this survey approach with other development sectors – clean energy is next – and ultimately the hope is to increase overall funding for international development thanks to greater confidence about outcomes and the ability to ensure value-for-money indevelopment spending.
With the additional challenges of climate change, the COVID-19 pandemic, and food insecurity dominating news from the developing world, we hope this data-driven approach will be just the spur needed to get global efforts to end poverty by 2030 firmly back on track.
Thinking longer term, one of the challenges in international development is that there has been a lack of strong comparable data and studies like this will help in the future, showing the Australian public this is work that changes lives.
Opportunity’s participation in the 60 Decibels Study and the results for our clients were covered in two articles in Forbes online, published in June and August 2022: