Grameen Foundation : What we do : Social Performance : PPI
Progress Out of Poverty Index
Grameen Foundation’s Progress out of Poverty Index (PPI) is both a management and a measurement tool. It allows microfinance institutions (MFIs) to better determine their clients’ needs, which programs are most effective, how quickly clients leave poverty, and what helps them to move out of poverty faster.
The PPI, which builds on previous efforts to measure and manage MFI social performance, provides an accurate and practical approach for MFIs to measure how and why their clients’ living conditions change over time. It helps MFIs:
- Define and adhere to their mission.
- Divide their clients into distinct poverty bands (very poor, moderately poor, and non-poor).
- Improve programs, products, and delivery of services.
- Increase their competitive edge, profitability, and ability to retain clients by responding more quickly and effectively to changes in their communities and by showing documented results.
- Provide timely and accurate information to socially responsible investors who may want to provide financial resources to their programs.
The Consultative Group to Assist the Poor (CGAP), Grameen Foundation and the Ford Foundation endorse the use of rigorous poverty assessment tools and believe the PPI is a highly effective tool for those institutions interested in measuring client poverty.
The PPI is a unique composite of easy-to-collect, non-financial indicators such as family size, the number of children attending school, and the type of housing. It is based on an approach developed by Mark Schreiner of Microfinance Risk Management, L.L.C. It is a user-friendly tool that estimates the likelihood that clients fall below the national poverty line, the poverty line that defines the poorest half below the national poverty line or the $1/Day/PPP and $2/Day/PPP international poverty lines. Each PPI is specific to its particular country characteristics as each is based on its country level income and expenditure household survey (e.g. Mexico’s INEGI database or Pakistan’s Integrated Household Survey), or the country-specific World Bank Living Standards Measurement Survey, depending upon which dataset has the most complete information. This index then serves as a baseline from which client progress is measured. By using benchmarks and standards of measurement that produce reliable information, managers can build client profiles and track how they change over time.
The Progress out of Poverty Index in action >
Visit the Progress out of Poverty Web site
Grameen Foundation : What we do : Social Performance : PPI
Grameen Foundation uses microfinance and innovative technology to fight global poverty and bring opportunities to the world's poorest people. With tiny loans and financial services, we help the poor, mostly women, start businesses and escape poverty. Our global network of 55 microfinance institution (MFI) partners including our Growth Guarantee partners has touched more than 34 million people in 24 countries. In addition, we introduced and now sustain technology initiatives (Mifos and Village Phone) in Cameroon, Kenya, Rwanda, and Uganda, bringing our total country outreach to 28.
+1-202-628-3560 www.grameenfoundation.org
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