ABSTRACT
This chapter considers the preliminary findings on the impact of microfinance on poverty alleviation from the research commissioned for the World Development Report on Poverty. Donors, policymakers, practitioners, and researchers have different priorities, standards, approaches, and uses for impact assessment. An important goal of USAID's Assessing the Impact of Microenterprise Services (AIMS) Project is to develop affordable impact assessment tools that can generate credible and useful results. The USAID study started with selected non-income dimensions of poverty—those related to risk, vulnerability, and assets. Microfinance clients at all poverty levels are vulnerable to a wide range of risks, of which illness, death, and loss of a household earner are the most prominent. Clients are more likely to use microfinance services to protect against risk than to smooth consumption following a shock. They accessed microfinance institutions services only when other strategies were exhausted or had failed.
