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60 Decibels unveils definitive assessment of microfinance’s social impact

60 Decibels unveils definitive assessment of microfinance’s social impact
  • 88% of microfinance borrowers agree that their quality of life has improved. 34% say the quality of life is “very much improved.”
  • 73% of borrowers report increased household incomes
  • Seven out of ten say personal savings and financial resilience have improved
  • Ten out of ten top microfinance institutions are in sub-Saharan Africa

Microfinance is improving the quality of life, increasing the resilience of low-income customers to withstand economic shocks, and reaching people without prior access to financial services without creating overindebtedness. These are key findings of the world’s first microfinance social performance report based entirely on customers’ voices, published today, the 60 Decibels Microfinance Index. By conducting interviews with almost 18,000 microfinance clients across 41 countries, the 60 Decibels Microfinance Index provides a ground-up perspective on the lives of 25 million microfinance clients, representing 15% of the global market.

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The report confirms that MFIs are promoting women’s economic empowerment. Microfinance institutions often focus on the most vulnerable populations, including women, people living in rural areas, and people living in poverty. Of the customers surveyed by 60 Decibels, 67% are women, and 30% live below the $3.20/day World Bank Poverty line. Over half of clients represented in this research (58%) are accessing a loan for the first time through a microfinance institution. Women and lower-income clients are also more likely to be first-time microfinance borrowers.

Microfinance has repeatedly faced scrutiny, as there is a risk that vulnerable populations will be hurt, not helped, by being given loans. However, 60 Decibels found that 3 in 4 clients report their loan repayments are ‘not a problem’ and they ‘strongly agree’ to understand their loan terms and conditions. In fact, across all regions, more women than men agreed their loan repayments were ‘not a problem’ (73% of women compared with 67% of men). This finding is consistent with women borrowers traditionally demonstrating higher repayment rates than men. That said, the report also finds that 6% of borrowers report their payments as a ‘heavy burden,’ and it’s essential that microfinance take steps to ensure that these borrowers don’t fall into heavy debt.

60 Decibels is a global, tech-enabled impact measurement company that brings speed and repeatability to social impact measurement and customer insights. We provide simple benchmarks of impact performance, enabling organizations to understand impact relative to peers and set performance targets. We have a network of 850+ researchers in 70+ countries. We have worked with over 800 of the world’s leading impact investors, companies, foundations, corporations, NGOs, and public sector organizations. 60 Decibels makes it easy to listen to the people who matter most.