Exploring New Ways to Assess the Impact of Microfinance: What Role for the Capability Approach?

Purpose The disagreement over the contribution of microfinance to fight poverty is mainly related to the wide range of methodologies used to study it. The aim of this chapter is to reveal the limitations of these methodologies and explore whether the capability approach may improve impact assessment, especially in the microfinance field. Methodology/approach The author’s contribution is based on a comprehensive literature review of the most cited scholarly studies on microfinance impact. Findings This contribution has two main findings: It identifies the characteristics of an impact assessment conceptual framework based on the Capability Approach. It also gives a documented justification on why this approach is an interesting way to evaluate the potential effects of microfinance programs. Originality/value Applying the capability approach to poverty in microfinance is not new. However, as far as we know this is the first contribution that tries to apply it to the specific issue of impact assessment.