"Gun Keshari has become a regular borrower of [an MFI] and over time, with the support of small, low-interest loans, Gun Keshari has seen a dramatic improvement in the living standards of her family." - Kiva Fellow, Nepal

According to CGAP, "Comprehensive impact studies have demonstrated that:
  • Microfinance helps very poor households meet basic needs and protect against risks
  • The use of financial services by low-income households is associated with improvements in household economic welfare and enterprise stability or growth;
  • By supporting women's economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being;
  • For almost all significant impacts, the magnitude of impact is positively related to the length of time that clients have been in the program." (UNCDF Microfinance)

"Poor people, with access to savings, credit, insurance, and other financial services, are more resilient and better able to cope with the everyday crises they face. Even the most rigorous econometric studies have proven that microfinance can smooth consumption levels and significantly reduce the need to sell assets to meet basic needs. With access to microinsurance, poor people can cope with sudden increased expenses associated with death, serious illness, and loss of assets.

"Access to credit allows poor people to take advantage of economic opportunities. While increased earnings are by no means automatic, clients have overwhelmingly demonstrated that reliable sources of credit provide a fundamental basis for planning and expanding business activities. Many studies show that clients who join and stay in programs have better economic conditions than non-clients, suggesting that programs contribute to these improvements. A few studies have also shown that over a long period of time many clients do actually graduate out of poverty.

"By reducing vulnerability and increasing earnings and savings, financial services allow poor households to make the transformation from "every-day survival" to "planning for the future." Households are able to send more children to school for longer periods and to make greater investments in their children's education. Increased earnings from financial services lead to better nutrition and better living conditions, which translates into a lower incidence of illness. Increased earnings also mean that clients may seek out and pay for health care services when needed, rather than go without or wait until their health seriously deteriorates." (http://cgap.org)

"Empirical evidence shows that, among the poor, those participating in microfinance programs who had access to financial services were able to improve their well-being-both at the individual and household level-much more than those who did not have access to financial services.

  • In Bangladesh, Bangladesh Rural Advancement Committee (BRAC) clients increased household expenditures by 28% and assets by 112%. The incomes of Grameen members were 43% higher than incomes in non-program villages.
  • In El Salvador, the weekly income of FINCA clients increased on average by 145%.
  • In India, half of SHARE clients graduated out of poverty.
  • In Ghana, 80% of clients of Freedom from Hunger had secondary income sources, compared to 50% for non-clients.
  • In Lombok, Indonesia, the average income of Bank Rakyat Indonesia (BRI) borrowers increased by 112%, and 90% of households graduated out of poverty.
  • In Vietnam, Save the Children clients reduced food deficits from three months to one month." (http://cgap.org)

"Microcredit may be inappropriate where conditions pose severe challenges to loan repayment. For example, populations that are geographically dispersed or have a high incidence of disease may not be suitable microfinance clients. In these cases, grants, infrastructure improvements or education and training programs are more effective. For microcredit to be appropriate, the clients must have the capacity to repay the loan under the terms by which it is provided." (http://yearofmicrocredit.org)