They say that “if you want to go fast, go alone, but if you want to go far, go together.” This is how I feel about achieving an impact. I learnt this the hard way, having run five marathons in my lifetime while devoting a decade and a half of my career to trying to generate positive impact on people’s lives.

The easiest of those marathons were the ones I ran with running partners. The toughest were the ones I ran alone. The one thing they all had in common was that I always knew exactly where the finish line was. It was at mile 26.2.

Wouldn’t it be nice if, in our work on financial inclusion, we had the luxury of knowing so precisely where the finish line was? And even when we have a clear finish line, like the “impact” line in our theory of change, or the targets in our log frame, achieving these impacts make the distance of 26 miles seems like a skip around the block. Often, we are just so relieved to finalise our log frame, that we sometimes forget how quantitative indicators and targets can shift our focus from what we want to achieve, to simply what is measurable and attributable. I hold up my hand. With the best of intentions, I’ve been there.

In 2006, I went to Morocco to do a market assessment. We were looking for associations of women textile weavers. One village we visited was known to be the home of many women artisans. For that reason, it had also received attention from a particularly aggressive microfinance NGO. At that time, the darling of poverty reduction policies around the world, microcredit was a major part of the Moroccan government’s national strategy for poverty alleviation.

In this village, I met a Peace Corps Volunteer who was living in the community. She told me that the women in the village, acting perfectly rationally but not understanding the loans, took the money from the NGO and bought things like TVs and make-up. These are totally legitimate purchases, but they are not productive investments. So, when the loan officer returned a month later for the first payment, the women had no way to pay and became trapped in debt.

Quest for indicators 

The NGO pushed those loans not out of greed but out of a quest for indicators. The loan officers, acting perfectly rationally as well, were probably held accountable to some variation of three indicators: 1) number of new clients, with a focus on women; 2) number of new loans, and 3) value of loans disbursed. Again, I hold up my hand, because, during my career, I have been that M&E person who defined metrics like these. But if we are honest about impact, these indicators created a race toward a misleading finish line for everyone from the policymakers to the microfinance NGOs to the loan officers that ultimately drove many of these women deeper into poverty.

In 2010, while working with AFI, I helped develop the core set of financial inclusion indicators that successfully fed into measurement frameworks for financial inclusion at the national, regional and global levels. We focused on measuring the number of adults with deposit or credit accounts at regulated institutions. It was a major landmark at the time and has been a powerful tool for mobilising financial inclusion.

Inclusion doesn’t always equal benefit

However, as policymakers are aware, financial inclusion is inextricably linked to its impact on people’s lives. Though they were financially included, the women in that village were not included in the benefits that the financial system affords others. They had many fundamental needs, but none were actually satisfied by their newly acquired financial services. For all of us working in this space, the need to set indicators is strong, but the temptation to keep them simple is often stronger. Fortunately, we are witnessing a renewed commitment to revisiting our indicators of financial inclusion and finding ways to close this measurement gap.

Towards the end of May 2016, I attended an event co-hosted by CGAP and FinMark Trust in Johannesburg that focused on putting customers at the centre of policy and regulation. At the heart of that discussion was financial inclusion impact, i.e. its impact on people’s lives. It’s a discussion that I, as the new Lead of insight2impact, take an existential interest in. It goes to the very core of what insight2impact is trying to achieve. The one thing I already know for sure is that insight2impact can’t do it alone. I also know that it won’t be easy. Unlike those marathons, where the route was prescribed, the path to financial inclusion is long and winding, and there are many tributaries along the way. We recognise that “impact” is part of our name at insight2impact, but we will be the first to say that our impact will take time, will be complex, and will be contributory to the work of others. We know for sure that we won’t achieve it alone.

At insight2impact, we are setting off on our own marathon. Over time, we will be developing measurement frameworks and indicators of financial inclusion, as well as new tools and methodologies, to ensure that the data people collect speak to the needs of policymakers and financial service providers. Our journey from data to financial inclusion is possible only through partnerships, with policymakers, regulators, researchers, financial service providers, data scientists, international donors, and others. We will be starting with designing an open data portal. For insight2impact, the data and tools hosted on our portal are not a success unless they are used by others to achieve their own goals and impacts in financial inclusion. The one thing we won’t do is try to run this marathon alone.

insight2impact (i2ifacility) was funded by Bill and Melinda Gates Foundation in partnership with Mastercard Foundation. The programme was established and driven by Cenfri and Finmark Trust.