Assessment of microfinance institutions and their impact: evidence from a scientometric study

Microfinance institutions (MFIs) are financial entities with a social purpose aiming to achieve high outreach. They ought to lend money to the poor, avoiding mission drift, and charging fair interest rates to avoid the poverty penalty. Like any business, they should try to be sustainable and operate efficiently to reduce the dependence on donations. MFIs should adopt appropriate governance practices that serve stakeholders, remunerate their employees fairly, and pay taxes. Furthermore, they are expected to have a positive impact on clients, the community, and society as a whole. Such challenging and diverse objectives make evaluating MFIs a complex task. This chapter reviews the main methodologies for assessing MFIs following a scientometric approach. We find improvements in financial aspects, outreach, and governance, but doubts remain on the impact of microcredit. The challenge is to find the specific characteristics of MFIs and the external circumstances that make microcredits have a positive impact.