Evaluation and Microenterprise Programs
Schreiner, M.
Publication Date: Aug 2001
Published by: Microfinance.com
Document Type: Paper
Are micro enterprise evaluations useful?
This paper argues the need to exercise caution in carrying out micro enterprise evaluations. It informs that most evaluations are partly subjective in nature and focus more on process, ignoring the impact.
The author suggests improvement in the evaluations by adoption of a more rigorous estimation of benefit and cost. This is to improve transparency and to help in logically deriving judgments.
The author reports the following drawbacks in the present method of evaluations:
- The cost component is not completely included;
- Benefits of micro enterprises are overstated;
- Reporting of cumulative flows conveys little information about the participation;
- Incomplete reporting of information, such as information on non positive measures and the dropouts, is omitted.
Based on the results of four major evaluations of micro enterprises in the United States, the author concurs that micro enterprises have had a positive impact. However, the evaluations still need to make a complete assessment of the impact of micro enterprises on the lives of the poor.
Finally, the paper makes some recommendations for improvement in the evaluations:
- The analysis must account for both benefit and cost.
- The incentive structure for evaluators should reward learning
- Output and cost must be compared to judge performance of micro enterprise program.
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