April 2010
Past Meets Present: An Early PPI User Trains a New PPI User
Negros Women for Tomorrow Foundation (NWTF) in the Philippines was one of the first microfinance institutions (MFIs) to pilot, test and adopt the PPI. Four years later, NWTF staff shared lessons they have learned with a PPI newcomer in the region, KOMIDA of Indonesia.
In March, three KOMIDA representatives, accompanied by a Grameen Foundation representative from GF’s Jakarta office, traveled to Bacolod City in the Philippines to participate in PPI Data Analysis training. This was followed by a special “Learning Visit” with NWTF.
Gilbert Maramba, the head of research for NWTF, told the KOMIDA participants how NWTF was implementing the PPI--sharing useful tips and techniques as well as challenges in scaling up its implementation. How the PPI influenced NWTF’s decision-making process prompted a lively exchange. Maramba explained how applying PPI results had improved NWTF’s targeting mechanism to increase their outreach to poorer households. He noted that NWTF is now in the process of determining how poverty information from the PPI can help its branches improve their efficiency and effectiveness in recruiting clients, providing better services, and managing risks. To further illustrate, NWTF arranged a branch visit to Valladolid, Negros Occidental so that KOMIDA representatives could hear from branch officers and staff on a one-on-one basis.
During that visit, KOMIDA observed the back-office processes in PPI implementation, including the systems being used by NWTF in its microfinance operations. They asked questions related to their own experience in Indonesia and identified some similarities and contrasts. They learned that the borrower-members themselves are actually depositing payments to the bank and not the NWTF staff, an area of particular interest to KOMIDA, which collects payments in far-flung areas. The NWTF plan helps to avoid robberies or hold-ups that are common in transactions involving transfer or custody of money, staff told KOMIDA. Branch set-up and back-office MIS support were other areas of interest to the KOMIDA team, which learned how data are encoded and transferred to the head office.
Finally, the NWTF branch officers and staff described how client poverty information compared with financial performance, such as number of years as a member, repayment rates, portfolio-at-risk (PAR) as well as type of businesses and poverty movement, and how these variables aid in their decision-making. Knowing the tenure (length of membership) and the poverty status of the clients, for example, enables NWTF to manage staff time more efficiently. In that case, understanding that clients who stay longer (more than three years) in the program tend to be less poor allows NWTF to devote more time to newer clients.
Armed with these new insights, the representatives from KOMIDA are now more determined to improve their own PPI implementation and maximize KOMIDA’s their potential toward reaching more poor clients with better services.
Want to learn more about how NWTF implemented the PPI? Check out the NWTF Case Study!
Cris Lomboy is the Asia PPI Specialist for the Grameen Foundation, he is based out of Manila.
Vietnam Village Agents Take Up the PPI
More than three dozen village agents from seven different communities were gathered at a training hall in Dakrong district in Quang Tri, Vietnam when I arrived there in February. Along with four project officers, the group would spend three days learning about the Progress Out of Poverty Index™ (PPI™).
This training was a first in many ways. Plan Vietnam was launching the PPI with the first Village Savings and Loan Program (VSLP) to use the tool in Vietnam. Started in 2009, Plan Vietnam’s Village Savings and Loan Program was providing financial services to more than 1,100 households in 36 villages after just seven months. Plan was keen to know the poverty levels of the program members and to track changes in these levels before expanding the program to other districts.
Another first: the program is managed by the Women’s Association of Vietnam, an quasi-governmental institution rather than an MFI. And the village agents are residents of the villages where the program operates, rather than loan officers traveling from an institution’s headquarters. For these village agents, the idea of tracking changes in poverty levels was a new concept. The challenge of the training was to help the agents, mostly women with little education and literacy, to understand and use the PPI.
I wa
s doubtful if the agents could understand how to use the PPI to calculate poverty rates, or the number of members below a given poverty line. After having some conversation with the group, I quickly realized that I needed to make the whole training simpler. Tam Le Hoi, the VSLP project leader, and I decided to put more emphasis on hands-on exercises. The simplicity of the PPI itself, and its credible origins, did the rest.
For example, once they learned that the PPI was constructed from the 2006 Vietnamese Household Living Standards Survey done the Government of Vietnam and not something made by Plan International or Grameen Foundation, the participants became confident in the tool. The PPI’s ten simple, non-financial questions and easy-to-calculate score were obvious, and the participants quickly understood them. The specific lookup table on how to calculate poverty likelihood also proved successful as participants were able to calculate the poverty likelihoods and soon after analyze results.
I am confident that the PPI can be successfully implemented through these village agents in Plan Vietnam in Dangkrong and potentially in new districts because of its simplicity and country-specific nature. Plan will also advocate that the Women’s Association use the PPI for other programs, such as their Safety Net Program. As part of a Safety Net Program, a government or another institution provides direct support such as livestock or rice in a poverty-stricken area; the PPI could be used to pinpoint the poorest households in the targeted community – this would be another first.
Muhammad Awais is a guest blogger on the Progress Out of Poverty blog. As the Regional Microfinance Advisor for Plan International in Asia, Awais focuses on helping integrate social performance metrics into Plan International’s work. He brings a great perspective from the MFI practitioner as well as from the network level of how to integrate SPM tools like the PPI into operations. He is based in Bangkok.
PPI MIS System Requirements
Using the PPI™ starts with collecting information from poor families who could be (or are) borrowers. MFIs go to their homes to collect this information. But the next important step in using those data to better serve the poor is to input it into a computer program of some kind. Most MFIs have management information systems (MIS) that they use to track other operational data like loans outstanding or savings balances. The best, most complete use of PPI data requires finding a way to integrate it into their existing MIS. Doing so successfully means that organization would be able to not only assess the poverty distribution of clients according to the PPI but also cross analyze PPI results against all of the other rich client characteristics that are contained within the MIS. Of course, customising these existing MIS to incorporate the PPI to get the best information has become a challenge for many MFIs.
“How do we incorporate PPI into our MIS?” is a frequent question posed by PPI users and potential users alike. To begin answering the question Grameen Foundation has published the working document, Basic PPI MIS System Requirements, to assist organizations in orientating their IT staff and outside consultants with the PPI data characteristics and required software functionality. This document is a working paper because it continues to build on the ongoing experiences of PPI Users. We ask you to use this document, leave us feedback in the comment box below and share experiences with us by email so we can continue to refine the PPI and MIS integration process.
The PPI is easy to store in a system but building out the functionality and usability is a process and depends on the current system being used. We hope that organizations will use this document as a guide to beginning the incorporation process.
Basic PPI MIS System Requirements (Working Paper)
