Measuring Microfinance

The fundamental question of microfinance’s impact is, “How are the lives of the participants different from what they would have been had they not received a microloan?” Answering the first part—“How are the lives of the participants different?”—is pretty easy. But answering the second part— the counterfactual “How would their lives have been different had they not received the microloan?”—is hard. This short piece calls for microfinance institutions to use randomized control trials (RCTs) to help answer this challenging question.

From Journal, published on 01-08-2008
Original document URL:


  • Prof. Dean Karlan, Yale University


  • Business strategy


  • Finance and business services
  • Other market services


  • Development
  • Entrepreneurship
  • Financing

back to top