Grameen Foundation has launched www.progressoutof-poverty.org, a website that demonstrates how microfinance institutions (MFIs) can understand and improve their social performance.
The website features information and resources about the Progress out of Poverty Index™ (PPI™), a poverty assessment tool that helps MFIs measure the poverty levels of their clients. The PPI was commissioned by Grameen Foundation in collaboration with the Consultative Group to Assist the Poor (CGAP) and the Ford Foundation.
In addition to providing MFIs with a step-by-step guide and training toolbox for implementing the PPI, the website will also be a portal for users to share their knowledge, experience and resources. The site also includes specific details on the nine countries where Grameen Foundation is currently working with the PPI to assist MFIs in realizing their social missions more effectively.
The new website also includes a case study detailing the experience of the first Grameen Foundation MFI partner to pilot and implement the PPI: Negros Women for Tomorrow Foundation in the Philippines. Grameen Foundation expects to have 38 usable PPIs within the year.
Grameen Foundation president and chief executive officer Alex Counts said that the PPI was central to its vision of microfinance and is rooted in the success of Grameen Bank’s leadership in being a double-bottom line MFI operating on a massive scale.
“If microfinance is going to live up to its billing as a business that charts both financial and social returns, MFIs must develop and agree upon statistically rigorous and transparent measures for social outcomes. The PPI offers the kind of measurement that is critically needed and we are excited to share this new website with the microfinance community,” Counts said.
Based on an approach developed by Mark Schreiner of Microfinance Risk Management, L.L.C., the PPI is a simple and accurate tool that measures poverty levels of groups and individuals and how those levels change over time.
Integrating the PPI into their operations allows MFIs to better understand their clients’ needs, evaluate the effectiveness of programs and products, and track how quickly clients leave poverty.
For each country, the process starts with a nationally representative income and/or expenditure survey. The data from the survey are analyzed to rank indicators that strongly correlate with poverty. These indicators are then tested and vetted with local MFIs and their representatives.
The initiative is being led by Grameen Foundation’s Social Performance Management Center, which promotes industry innovations that enable MFIs to better target and track the progress of their clients.
This first phase of the PPI website focuses on MFIs. A second phase focusing on the social investor community will follow. 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 the likelihood of client poverty.