Microfinance institutions have been undergoing a transformation from the donor funding model to commercialization. What are other elements of this transformation and how can they be measured?
Other elements in this regard may include the factors accounting for social responsibility (women empowerment, for instance, which can be measured by women education level and employment).
in this regards you can include the poverty alleviation, employment opportunity also. Further, Women empowerment could be measured using decision making power on household level regarding children education, marriage, health care and purchasing goods, expenditures etc.,
Transformation of MFIs as defined by Ledgerwood (2004) is the process whereby an NGO/ MFI transforms into a licensed regulated deposit taking financial institution. The reasons for the same could be better growth, better governance, better regulation and access to diverse sources of funds. The effects of such transformation could be seen in growth in the number of active borrowers, GLP, average loan balance, change in the legal status etc.
As mentioned by Fehr (2006), as the MFIs grow in size and operations, the funding approaches change from donor grants to debt funding and equity financing. Hence, through transformation the MFI opens doors to better funding and regulatory structures.
Reference
Ledgerwood et al. (2004), Transforming Microfinance Institutions published by the World Bank.
Fehr, David, and Gaamaa Hishigsuren (2006), "Raising capital for microfinance: Sources of funding and opportunities for equity financing." Journal of Developmental Entrepreneurship 11.02: 133-143.
I understand that sometimes microfinance institutions transform themselves if there is a legal frame that suits them. Good examples concerning this aspect can be taken from Perú and Bolivia. From each country, two examples that grew from NGO to banks are: Mibanco in Perú and Bancosol in Bolivia.