Reaching the poorest members of the population is an important objective in many development interventions, and microfinance is no exception. We review performance indicators for the effectiveness of targeting described in the literature, and suggest a new metric to account for the extent and severity of poverty as well as the income distribution among the poor. In applying this to a panel dataset from a community-managed microfinance intervention in Northern Malawi, we find regressive outreach: participants are less poor than the general population in the area. In addition, we provide suggestions as to when and why the poor exit the project.
In 2014 the article was accepted for publication in the international interdisciplinary journal for development studies World Development Vol. 64.