This article describes the process by which an impact monitoring system was designed and built into a fairly recently launched Zambian microfinance organization, CETZAM. Developed with funding from DFID and initial technical assistance from consultants, a system was designed to monitor impact through a means test for all new clients, an annual impact survey and an exit survey for dropout clients. The first results from the system have fed into CETZAM's decision-making on loan size, repayment frequency and new products. This article describes the lessons learned, and assesses whether this system matches up to the principles of an 'impact audit'.
Will commercial funding in microfinance lead to better services for more poor clients? Or will it be a rerun of the subprime crisis? The answer depends on what we do now to set up a web of regulations and practices that expand the market while protecting clients.