ABSTRACT
The microfinance is probably the one that is the most concerned about its impact. Conversations about microfinance mostly focus on claims and evidence of changes in the lives of the poor. "Impact of microfinance" obviously is a minefield complicated by the heterogeneity of institutions providing microfinance. Microfinance institutions affect the lives and work of their clients in different ways. The use of microloans can lead to higher productivity and income, more or less child labour, more or less leisure, more self-confidence in a woman entrepreneur, access to input markets, recruitment of labour from outside the family, over-indebtedness and so forth. Self-selection by programme participants can lead to overstating the beneficial impact of microfinance. Demonstrating impact in development is never simple, not just in microfinance. One needs lots of household data, often on sensitive issues – hence, likely to be biased – and one needs long time series data to control for variations over time.
