Measuring the social and developmental effects of commercial Microfinance: – the case of AfriCap

Abstract: This paper studies the assessment of social and developmental effects of Microfinance through the case of AfriCap, a Microfinance investing Private-Equity firm based in Mauritius/South Africa. The query investigated is whether and how AfriCap can measure the non-financial returns on it investments. We find that the field is in flux and that diverging trends in academic and industry practise seriously question the possibility for measuring actual impact of Microfinance operations on the ground in LDC countries. Complicating this fact is that the operational realities of many Microfinance operations do not work to facilitate impact assessment. In essence, our recommendation to AfriCap and the wider field is to take anactive stand on the ambition versus cost trade off that condition the possibility to develop reliable impact assessment. We speculate that thefield is in need of clearer leadership and ambition to bring academia, industry networks, multilaterals and individual MFI: s and SRIs together tosolve the still beckoning question – Does, and how does Microfinance work to deliver positive social and developmental Impact?