On my last day in Huancayo, I saw two examples of village banking that showed why this approach works for PRISMA in Peru. “Village banking strengthens social networks,” PRISMA Director Diego Fernandez told me. It is the best way to educate and motivate clients, he says, because they can learn from and support each other.

In the morning a group of 15 clients, 11 women and 4 men (spouses) gathered at the PRISMA office. This was a “mature” group which had been through multiple loan cycles together, some as many as 14. The topic for the meeting was money management: why it is important to keep business funds and family money separate. The session ended with a written, ten-question test, labored over by the clients. Example: I have to know enough mathematics to be able to understand my bills and to determine exactly the profits from my business—true or false.

 In mid-afternoon I visited quite a different village bank meeting—this one held outdoors in the middle of a potato field. It was potato harvest time and the dozen clients who made up the village bank chose to gather in a corner of the field with their loan officer rather than leaving the field. Some clients had been in this group for seven years. One older mother was joined in the group by a daughter and a daughter-in-law, each with one a swaddled baby. All said they used their PRISMA loans for growing their crops, and for some animals including cows, sheep, pigs, bulls and guinea pigs. With their harvest income, they buy seeds and fertilizer for their next crop. “We always win at harvest time,” said one. The group confirmed that they had never experienced losses with their harvested crops. When the meeting ended, they all drifted back into the field to continue the harvest.

Pat Kelly is Senior Communications Officer at the Grameen Foundation Social Performance Management Center (SPMC). She is based in Washington, DC.

It is not so easy to get to Pampas. Our group—Norma Rosas from PRISMA, Yolirruth Nunez, social monitoring officer with Oikocredit, and myself—set out from the nearest city, Huancayo. After two hours on a rocky road with hair-pin curves, we arrived at this rural town in a deep valley. It was worth the journey. We spent the day visiting with five PRISMA clients whose businesses ranged from selling potatoes, foods and prepared meals, clothing, and sundries. But agriculture dominates the region, and most clients work at that. And most—even those selling food and clothing—have cows. 

We learned this during a village bank meeting held at the PRISMA office when we arrived. From the dozen clients in attendance, almost all of them owned at least one cow. One client owns 11. One key reason: a Peruvian dairy, Leche Gloria, has offered contracts to the clients, ensuring the purchase, and pick-up, of milk and cheese. For most, this is extra income they can earn in addition to their main businesses.

For others, like Julia de la Cruz and her daughter-in-law, Irma Cardenas, raising cows and selling milk and cheese is their business. Both have been PRISMA clients for three years. Julia now owns one cow, but has two calves. She typically sells 10-20 liters of milk each day, depending on production. One liter brings one Peruvian sol, or about 30 cents.

There are currently 1,271 PRISMA clients in the Pampas area, and more than half—the poorest—live in surrounding communities, often bordering on the rainforest. The farthest community is one and one-half hours from the town. Some numbers for context: when PRISMA conducted its PPI survey in Pampas in May 2009, 69.29 percent of its representative clientele was found likely to be below the national poverty line. New clients surveyed were 51.97 percent likely to be below that line. PRISMA is prepared to begin its annual survey within weeks, and this year it plans to track the new clients from 2009 to check their progress.

Pat Kelly is Senior Communications Officer at the Grameen Foundation Social Performance Management Center (SPMC). She is based in Washington, DC.

“What is your main source of drinking water?” “Does your household own a refrigerator or freezer?” “A motorcycle, scooter, car or other vehicle?” The questions in the Pakistan PPI are simple, but it’s hard to get answers for a variety of reasons, according to Javed Baig, Joint Director, OCT.

The poor clients are reluctant to give names, ages and national ID numbers of their females, especially of young females in their households. The male data collectors cannot cross the drawing room (guest entertainment room) to enter the home to verify the answers.

Women can enter client homes, but they have to get to them first. Females cannot travel alone on public transportation among villages. And providing private transportation increases the cost of data collection. Male collectors can collect data after sunset, which is necessary during wheat harvesting season in order to find clients at home. But women are not allowed by their families and social norms to work at night.

These are among the challenges facing the Microfinance Organization Network of Pakistan (MON-Pak), a network of microfinance organizations established by OPP-OCT and spanning four provinces: Sindh, Punjab, Balochistan and Azad Jamu, and Kashmir. Plan International supports MON-Pak’s efforts to implement the PPI among its members, most of them in Sindh, where the PPI is administered in Sindhi.

Many households also are confused by other surveys being conducted as well as the PPI. In some of the same villages, private and governmental organizations have asked questions similar to those in the PPI. The recent Benazir Income Support Program, a governmental social protection program, is one. In addition, some clients wonder why MFIs are asking the same questions which were being asked in the loan appraisal, and why the PPI responses can’t be taken from that information. Since the population census collected similar data at household levels, clients wonder why MFIs are asking these questions when they are not census collectors. And clients fear that giving information about their assets and income will make them subject to taxes.

Finally, after answering questions, clients expect to see results. In this way, the PPI survey itself can raise expectations. Clients sometimes look for cash or in-kind support to help solve the problems they have described. Women in particular have asked the data collectors to help with their children’s education, drinking water, and the non-availability of toilets.

MON-Pak is working to address these challenges by building confidence in the PPI among clienst, restricting data collection by females until sunlight and explaining to clients how the PPI differs from other surveys.

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.