Developing an Impact-Oriented Measurement System

This guidance paper, published by FSD Africa in January 2016, provides a framework for Financial Sector Deepening (FSD) programmes to assess why changes occur in the financial sector and the extent to which their interventions contributed to those changes. It focuses on Stage 2b of the Impact-Oriented Measurement (IOM) system, detailing methods for assessing causality and establishing a research agenda to bridge knowledge gaps in financial sector development and poverty reduction.

• Assessing causality in FSD programmes is challenging because they act as market facilitators, working through partners and in combination with other factors, which makes the distinction between 'treated' and 'untreated' elements unclear.
• FSDs are advised to adopt a pragmatic, evidence-based approach to causality, aiming to 'convince a reasonable but sceptical observer' rather than seeking absolute proof. This involves testing cause-and-effect relationships within the Theory of Change (ToC) rather than testing every single causal link.
• The document outlines a dual approach to measuring causality: a 'bottom-up' approach that tests how the programme ToC is operating to cause observed market changes, and a 'top-down' approach that examines sectoral-level changes and their drivers, including those removed from direct FSD interventions.
• Causality measurement methods are categorized into theory-based approaches, which rely on quality evidence and logical testing (e.g., contribution analysis, outcome mapping), and quantitative statistical approaches, which use experimental or quasi-experimental designs to construct counterfactuals.
• FSDs should allocate resources for causality analysis based on specific criteria, including the complexity of the causal pathway, the importance of the pathway to the overall ToC, the size and cost of the intervention, the existing gap in understanding, and the potential for impact on livelihoods or the financial sector.
• A research agenda is recommended to address knowledge gaps that standard monitoring cannot fill. This includes research to improve FSD effectiveness, contribute to global knowledge on how financial inclusion reduces poverty, inform strategy and design, and facilitate market development.

APA

FSD Africa (2016). Developing an Impact-Oriented Measurement System. https://fsdafrica.org/wp-content/uploads/2025/05/11655-Impact-Oriented-Sys_Chp5b_sngl_LR.pdf

Chicago

FSD Africa. Developing an Impact-Oriented Measurement System. 2016. https://fsdafrica.org/wp-content/uploads/2025/05/11655-Impact-Oriented-Sys_Chp5b_sngl_LR.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Developing an Impact-Oriented Measurement System |date=January 2016 |url=https://fsdafrica.org/wp-content/uploads/2025/05/11655-Impact-Oriented-Sys_Chp5b_sngl_LR.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2016developing, author = {{FSD Africa}}, title = {{Developing an Impact-Oriented Measurement System}}, institution = {FSD Africa}, year = {2016}, month = jan, url = {https://fsdafrica.org/wp-content/uploads/2025/05/11655-Impact-Oriented-Sys_Chp5b_sngl_LR.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }