How does one measure the impact of projects that are not always easily quantifiable? This is one of the questions that was brought up in an article series on philanthropy in the New York Times Magazine. Such measurements are easy to establish with projects like distribution of childhood vaccines. We simply count the number of vaccines given out, compare this with the cost of getting these vaccines to the target groups, and figure out whether the intervention is cost-effective.
This type of impact assessment is not as straightforward for the Masomboly micro-lending project. One of the questions we are interested in, is finding out whether the individual lending model promotes greater entrepreneurial activity. Are women who area funded with individual loans able to be more creative and take more risks? The question is, how do we measure this? We were thinking of categorizing the types of businesses funded through the group versus individual loans. This would show us if there were businesses that were ‘out of the ordinary’ in the individual lending group. We are also recording weekly consumption, so that we can see if consumption of households with individual loans increase by more. This would capture whether individual loans lead to more profitable businesses. Any other ideas?
There are other outcomes from the project that are even more difficult to quantify. Women are telling us that they are more respected by their husbands now that they have these loans and businesses. Some women say they are proud to have been able to celebrate a real Christmas. Others are proud to put better food on the table for their families. These are not necessarily easy outcomes to measure in a survey. But to an investor, these are just as important outcomes that should be taken into account in evaluating the impact of such an intervention.