Oikocredit Supports Record Number of Investees to Know their Clients Better with the PPI >
An interview with Yolirruth Nuńez and Kawien des Plantes
Oikocredit is a worldwide cooperative with a mission to promote responsible investment. It provides financial services and supports organizations that improve the quality of life of low-income people or communities in a sustainable way. Read more about microfinance...
1. When did your organization start using the PPI, and why? What was the need you were hoping to address?
Oikocredit started using the PPI in 2007 following the establishment of a partnership with Grameen Foundation to provide technical assistance to help our partners implement the tool. Up until 2012 there was regular coordination with Grameen Foundation to support PPI implementation in some of Oikocredit’s regions. Now more than 80 of Oikocredit’s investees use PPI.
The reason for starting this work with the PPI was the need for reporting poverty outreach data at the level of the microfinance institutions’ clients and to track over time the information about poverty gleaned from MFIs’ yearly data on PPI. Our management and investors look for this data because of Oikocredit’s mission to reach people in need and improve their quality of life. Read more about social performance...
2. How does your organization use the PPI? To measure poverty outreach? To improve social performance (targeting or product/service design)? To track changes?
The PPI is used to measure the poverty levels of clients, or poverty outreach, of the financial service providers (FSPs) that Oikocredit invests in. It is also used to track changes over time when organizations have collected PPI data for several years. Oikocredit has included poverty indicators in its annual social performance monitoring and is able to share this data with our partners who are using the PPI.
Furthermore, under our Outcomes Programme, PPI data forms part of the data analysis at the end client level and assists FSPs in getting to know their clients better. Read more about social indicators and building capacity...
3. Does your organization collect PPI data directly from households, or do you get PPI data reported to you from partners/investees?
Our partners (investees) report the PPI data on an annual basis when gathering social indicators. We have a template with social and environmental indicators set by Oikocredit which are completed by the partners and reviewed by Oikocredit’s regional offices.
4. What did PPI data tell you that you didn’t already know? What actions has your organization taken as a result of what you've learned from the PPI data? For example, have you made changes to your product offerings, your client base, or your business model? Or chosen to invest or partner with organizations differently?
Basically, the PPI data has been useful to confirm the levels of client poverty that our partners face, according to the areas they work in, whether in urban or rural regions. Therefore, it has helped FSPs to understand their client profiles and how they can adapt their products to their needs.
In the case of tracking over time, the data from responses to individual questions have been very helpful in showing partners how clients’ situations have been changing and getting some insight into the reasons for those changes. For instance, adding qualitative questions like "What was the reason of the change?" or "Where were funds obtained to make changes?" have been useful to FSPs to understand if their products and services have been helpful to clients.
For example, as the PPI has questions related to client housing, some partners have tackled the lack of adequate housing as part of their financial product offering. If PPI responses indicate that there have been improvements in the material of the house over time, then it can be asked if those improvements were made with savings or with loans and where the client got such funding.
5. Is PPI helping you to achieve your goals? What impact do you think PPI has had on your organization and/or its beneficiaries? How many people do you think have benefited from your organization’s use of the PPI?
In terms of Oikocredit’s social performance management, as well as our partners’ social performance, PPI is helping to show the poverty outreach to clients. This means demonstrating whether the mission is being achieved.
Furthermore, an important benefit to the clients is that our partners can segment their clients per poverty levels. This allows them to learn more about their needs and create products related to those needs. An example is that based on the results of the PPI, some of our partners have understood the need for improvement of clients’ houses. The development of loans specifically for improving housing conditions has been one of the impacts at the level of the actual client. In a few words, the PPI can be very helpful for getting to know the client better.
6. Discuss the difficulties you faced (or still face!) when using the PPI. How are you solving them?
There are some difficulties in implementing the PPI, including the lack of a system for logging the information. Basically, an organization needs to have the system implemented within its management information system (MIS), otherwise it is very difficult for them to analyze and track the data if it isn’t stored together. Some FSPs included it in their MIS, which makes it easier for reporting and tracking over time.
Another challenge has been the lack of analysis done by FSPs; they may gather the information, but don’t necessarily make changes based on it. This is basically due to the lack of a system where PPI can be stored and managed with other client data that allows reports and tracking the information over time.
Occasionally, some partners ask for training in the use of the PPI, and it would be beneficial to have, as before, training to help partners gather and update poverty information.
7. Has the way your organization uses the PPI changed, or does your organization have plans for it to evolve in future? If so, how and why?
Although it is not part of the current strategy, when a partner asks for training, we try to support them with a two-hour coaching session.