The twin objectives of any micro-finance institution are to be financially viable, and to maximize the access of its services to the poor. While it is a difficult juggling act to be able to reach the poorest of the poor and remain financially sustainable, it is, nonetheless, the poor that make up the clientele and provide for the successes of the industry. Therefore, those MFIs that can plan for and maintain a high level of access while applying sound financial and managerial practices are likely to succeed. What is required is a means of showing how effective their operations are at raising the living standards of their customers, especially among the most impoverished.

The information required for such a task would need to take into account how well the MFI contributes to their clientele's ability to:

• Increase, stabilize and diversify their revenues;
• Ensure basic goods and services, foods and medicines among others for their households;
• Improve household living conditions, in particular those of women;
• Increase household wealth; and
• Increase participation in economic and social life as well as fostering autonomy among various population groups.

There are a number of important questions to be answered about the practicality and efficacy of an Impact Assessment Rating system:

Poverty impact assessments may show individual donors that their money is being spent well, but can it satisfy private investors, such as commercial banks?

It is taken as a given that an MFI must be financially viable before it can improve access to the poor. Thus, it is important that the MFI become financially sustainable; then it can offer whatever level of services it wishes to its customers. However, with the sudden proliferation of MFIs and the multitude of different business practices they employ, it is difficult to predict which ones will be ultimately successful. It is in this respect that one ought to look at what has driven the microfinance industry-the resourcefulness of the poor. The growth of the industry is based on the tapping of a resource that was previously deemed to be unprofitable. Indeed, it is the ability of MFIs to increase the living standards of the poor that is an indicator of their success. If an MFI can be acknowledged for improving the lot of its clients as a result of its level of access, it is a good indication that the MFI will be sustainable in the long term.

If individuals and households are to be seen as emerging from poverty, how do you go about defining "poverty"?

This question revolves around the issue of what standards, performance indicators, or benchmarks are most appropriate for an assessment rating. These would, as mentioned, either be formed by the MPA or decided by those organizations tapping into an MPA Rating Fund, led by certain minimum guidelines. The acceptance of such measures can be seen in how many MFIs and evaluation agencies voluntarily involve themselves in the system, and what kind of reaction it is given by donors, investors and banking institutions.

How do you know if someone has risen out of poverty due to the services offered by the MFI, or if it was due to something else?

The answer would have to be determined from the accuracy of the methodology used, but would also depend on taking a deep look into all the factors involved in poverty alleviation. MFIs will certainly be more successful if they are working in a favourable environment, and if their efforts are supplemented by different sorts of development initiatives within the community. How an MFI takes advantage of its surroundings and how it associates itself with other development organizations may be determining factors in its impact on poverty alleviation.