Microfinance organisations (MFOs) collect various types of information from their clients. However, it is often the case that this information is not used effectively to enable the MFO to better understand its clients and respond to their needs. The idea of the feedback loop is that this information is valuable and better use can and should be made of it. The key to improving impact on clients is to find ways of gathering and using information that will lead to improved products and services that are more responsive to clients' needs. The feedback loop describes the stages that information moves through in an organization from its initial generation to the implementation of changes in products and services. By following the different phases of the loop, an MFO is more likely to consider all the issues involved in decision-making and implementation, and make more effective use of data collected from clients. An examination of how an MFO uses its information can be carried out either by the MFO itself or by external assessors.