In Numbers We Trust: Measuring Impact or Institutional Performance?
This chapter explores some of the social processes in microfinance practice through which the planned and desired scores on quantitative "objectively verifiable indicators" (OVI) are produced, thus constructing the successful reputation of the microfinance institution (MFI) in terms of institutional performance, while impact on poverty reduction is unascertainable. Examples of everyday practice in a Bolivian MFI are shown and discussed in relation to chosen indicators of "best practices" and institutional performance. Inherent contradictions in policy and priorities are exposed, as well as strategies to overcome them. The chapter suggests explanations for how practice, with an emphasis on responsible behavior, is shaped by the imperative concerns to produce successful outcomes. Facilitated by ambiguous ideas that microfinance equals poverty alleviation and empowerment, policy constructs microfinance as a success, while practice sustains policy by producing "responsible" clients and the planned predefined quantitative goals for institutional performance. Keywords:Bolivian microfinance institution (MFI); empowerment; institutional performance; poverty targeting; social inclusion