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ADRA Case Study: Executive Summary

Project Background


Global Partnerships (GP) is an impact-first investor whose mission is to expand opportunities for people living in poverty. GP invests in social enterprise partners that deliver high-impact products and services that enable people to earn a living and improve their lives. GP’s portfolio is comprised of a growing number of investment initiatives that are designed to address various facets of poverty.

GP is dedicated to understanding the outcomes achieved through its investments. They employ an iterative impact management practice that draws on qualitative and quantitative data from various domains to gain deeper insight into what works, why, for whom, and under what circumstances. As part of its ongoing learning program, GP launched a case study initiative with partners across several of its focus areas. This report describes the results from a case study conducted by Microfinance Opportunities (MFO) in partnership with the GP-investee ADRA in Peru.


ADRA is an international non-profit institution working in more than 130 countries and across nine crucial impact areas to implement region-appropriate solutions for positive and sustainable change. In Peru, ADRA operates a microfinance program for vulnerable, female micro-entrepreneurs that live in peri-urban and rural areas. Its microfinance program uses a village-banking methodology, where groups of 15 to 35 women collectively receive a loan from ADRA and guarantee its repayment, managing the distribution of the loan and repayment internally. ADRA is aligned with GP’s Women Centered Finance with Education initiative, as they offer education programs in conjunction with their village-banking program.

Research Objectives and Design

GP and ADRA entered into this study with the goal of learning more about ADRA’s clients and the effectiveness of its education programs in order to support the development of ADRA’s products and services. Specifically, the partners aimed to answer three research questions:

What is the poverty profile of ADRA’s clients?

How resilient are ADRA clients to fluctuations in their cash flow and to economic shocks?

Do clients demonstrate knowledge, attitudes, and behaviors aligned with ADRA’s education programs, specifically the over-indebtedness module and the personal health module of its education programs?

MFO, in consultation with GP and ADRA, designed a survey to provide insight into these questions. The survey collected descriptive data from clients on a diverse set of socioeconomic indicators. It also collected data on knowledge, attitudes, and behaviors related to over-indebtedness and health education.

The study took place in ADRA’s Pucallpa branch, located in the Ucayali department, in the Amazon rainforest of eastern Peru. At the time of the study, the Pucallpa branch office served roughly 3,700 clients in 179 village groups.

MFO selected groups that had completed either one or both education modules as well as groups that had not participated in either module in order to allow for an analysis of the education programs’ effectiveness. In total, MFO surveyed 406 clients:


MFO’s survey showed that at the time of the study, ADRA’s clients had a poverty profile consistent with individuals living in moderate poverty in Peru. They reported having reliable livelihoods but sometimes these were not enough to cover their expenses.

Clients worry about the ability to respond to shocks. While they are likely to be able to respond to such shocks if they occur, some may have to turn to particularly stressful strategies like taking on more debt in order to do so.

With regard to the education programs, there was evidence of ADRA clients displaying knowledge and behavior associated with over-indebtedness and health education. However, the data showed only slight differences in knowledge and behavior between clients who had received the education and those that had not, after controlling for other factors, such as tenure with ADRA, whether the clients had received education through other institutions, clients’ education, and clients’ poverty level.

For example:

  • Over-indebtedness Education

In evaluating the effectiveness of the over-indebtedness module, the data suggest that clients who had received the education were better able to recall the interest rate on their loan than clients that did not receive the education.

  • Health Education

In evaluating the health module, econometric models suggested the education had a positive effect on clients’ outlook on life.

Key Insights

Microcredit has demonstrated the capacity to reach those living in poverty; however it can be harmful for those who don’t have the capacity to repay. Knowing this, Global Partnerships invests in MFIs, like ADRA, that demonstrate strong financial inclusion and client protection, going beyond credit to provide clients with the information they need to make informed decisions. This case study indicates that ADRA’s clients by and large demonstrate basic credit knowledge and have the capacity to repay. It also points to areas where ADRA might lean into deeper inclusion and/or a more robust education curriculum.

Progress out of poverty is not linear. Households experience shocks and setbacks along the way. While clients’ monetary poverty levels may not appear severe, they remain economically vulnerable and carry that stress with them. Without access to appropriate financial tools, households may resort to negative coping mechanisms such as taking out a loan to pay off another loan. Microfinance is one of many tools that households utilize to increase their economic resilience.

To evaluate the efficacy of ADRA’s education program, this case study used statistical methods to control for external factors such as clients’ education and poverty levels. In doing so it aimed to determine whether changes in client knowledge, attitudes and behavior can be attributed to the education delivered by ADRA. The results indicate that by and large clients demonstrate the desired knowledge and behavior but with the exception of a couple of areas, it is difficult to attribute this to ADRA’s education program. From a business perspective these findings present an opportunity for ADRA to focus their curriculum on areas where client knowledge is weakest.