Anecdotal Evidence Won’t Help Us Understand Financial Inclusion

Here’s a piece I just published reflecting on the findings of the 60 Decibels 2023 Microfinance Index, which we launched last week. As an industry, it’s time to stop falling prey to superficial claims about “lives impacted” that masquerade for meaningful impact; and it’s equally important that we question broad-brush journalism that relies on a handful of targeted customer interviews to paint the picture of an entire industry. We say that we are in the business of improving peoples’ lives. If that is true, then we owe these people the respect and deference of listening directly to them in a systematic, rigorous way, to hear what they have to say about what is happening in their own lives. My full article is here.


An article published last year in Bloomberg was highly critical of the microfinance industry and the international institutions that invest in it. The article described many negative practices—including but not limited to aggressive debt collection—and implied that the microfinance industry is doing serious harm to customers while international, public, investors turn a profit.

While there are, in fact, serious issues in the microfinance sector that need to be addressed—including over-indebtedness, debt collection practices and discrimination—these issues need to be seen in the context of many of the very positive impacts that microfinance is having for clients. And, more importantly, both the negative and positive impacts of microfinance need to be quantified objectively, to better understand the proportion of clients microfinance is working for, and the proportion that it’s not.

This kind of balanced approach is not possible when reporting is done with small scale,  largely anecdotal evidence about a complex situation on the ground.

As I have said in the past, social interventions like microfinance loans vary a lot in their characteristics and impact across contexts and periods. It is problematic to use a handful of interviews with clients or “experts” and extrapolate about an entire country or industry from these narrative accounts. And yet, the basis for the article’s broad claims are “dozens” of interviews with microfinance borrowers, along with expert interviews—a radically narrow sample from which draw sweeping conclusions.

What we need is large-scale, objective, comparable customer data to understand what’s really happening for all—and not just a few—customers. In service of these goals, in the last two years, the firm I lead, 60 Decibels, has listened to more than 50,000 microfinance customers in 41 countries, using a single, standardized survey tool that allows for full comparability across all questions. For each institution, we spoke to a representative, random sample of clients, and, in total, these customers represent an estimated 48% of the 173.5 million microfinance clients globally.

We can use insights from this data to cast some light on the murky claims made in the Bloomberg piece.

  • Claim: Clients are pressured to sell their homes, land, and other assets in order to make repayments.
  • What we found:  19 out of 20 of the microfinance customers we spoke to said that agents treat them fairly, are trustworthy, and have never pressured them to sell an asset.

(read the rest of this article on the 60 Decibels website).