In the Punjab section of Pakistan, just south of Islamabad, is the district of Chakwal—a focal point for an innovative community development effort based on poverty measurement. Since May 2010, no fewer than 68 villages surrounding Chakwal have been participating in a new initiative to help the poorest among them. The program, Plan Chakwal, supported by microfinance network Plan International, has been leading the way in using the Progress out of Poverty Index (PPI) to guide its community development work.

Led by Shabbir Hussain, Plan Chakwal’s livelihood coordinator, and Aziz Malik, Plan’s community development facilitator, Plan Chakwal over a three-month period (June, July and August, 2010) collected 18,003 PPI scorecards from the 68 villages, using a census approach. Because these villages have local community base organizations (CBOs) to follow through with community development work, they were chosen for PPI data collection.

This blog is also available in Spanish below the English copy.

For three years, PRISMA Microfinance has been using the Progress out of Poverty Index (PPI) to help us reach and serve our poorest clients: rural women.

We began to implement the PPI as a pilot in 2008 in two of our branches, and thanks to that good experience, in 2009 we expanded its use to all of our offices. Our goal was to reach the poorest people, and to monitor if and how their poverty levels changed. To do this, in 2010 we surveyed a sample of customers who were new in 2009, and found that--in one year--2.6 percent of these clients had moved above the national poverty line.

The use of PPI has allowed us to focus our efforts on reaching our target clients (the poor and vulnerable), and explore strategies to improve our services and deepen our efforts to reduce poverty. For us, as a microfinance organization with a social heart, the implementation of the PPI confirms that as a tool it is standardized, valid, comprehensive and flexible.

This blog is also available in Spanish below the English copy. 

By carrying out the MISION Program of Catholic Relief Services (CRS), REDCAMIF, a Central American Microfinance Network, has helped expand social performance management (SPM) among microfinance institutions (MFIs) affiliated with national networks in the region. During the past four years, 52 MFIs have begun to implement SPM systems in their operations.

To further these social performance implementations, REDCAMIF in January joined forces with Grameen Foundation to promote the use of the Progress out of Poverty Index (PPI) a poverty assessment tool designed to address some key challenges faced by MFIs. These include: how to properly identify target clients, especially among the poor population; and how to measure change in living conditions--in this case, what percentage of customers is moving out of poverty. To introduce and promote the PPI, REDCAMIF sponsored the recent workshop to train network trainers, who could then work with MFIs. The workshop was hosted by ASOMI, the network from El Salvador. It was attended by eight consultants and staff from the Central American networks REDIMIF, REDMICROH, ASOMI and ASOMIF. Trainers included Mary Jo Kochendorfer and Sergio Correa from Grameen Foundation and Jack Burga, director of the MISION Program.

As the new Latin America and Caribbean PPI specialist for Grameen Foundation, I have just completed-- and helped facilitate-- my first Training of Trainers course in San Salvador, El Salvador. During the last few weeks, Mary Jo Kochendorfer and I have been preparing all the materials for the sessions while I learn as much as possible about the PPI. The training was coordinated by Central American microfinance network REDCAMIF, and hosted by ASOMI, the microfinance network in El Salvador. The participants were a group of consultants who work closely with members of various national associations in Central America on social performance managerment (SPM). They will have the important role of introducing the PPI to microfinance institutions (MFIs) interested in poverty measurement. So our first objective was to train the participants in the value and knowledge of using the PPI so they would feel more confident supporting MFIs in the process of using the tool.

Most of our participants had worked with their countries’ MFIs through the CRS-MISIÓN Project, which encourages MFIs to measure social performance and report those results. The commitment of the MISION Project to carrying out these goals was clear at the training. Jack Burga, the CRS-MISION director, and Tomás Rodríguez, coordinator of the program for Central America and México, participated. Jack told the group how investors are now looking for MFIs that can demonstrate strong financial performance with measurable social performance results. Tomás highlighted the importance of the PPI as a tool for targeting clients, measuring outreach to the poor and designing products focused on meeting the needs of the poorest clients. The clear support of Jack and Tomás resonated with the participants and demonstrated how
the region is truly prioritizing social performance and
transparent poverty measurement.

Lift Above Poverty Association (LAPO), Microfinance Bank Limited in Nigeria—the largest microfinance institution (MFI) in the country—ended 2010 with a Training of Trainers (ToT) workshop on the use of the Progress out of Poverty Index (PPI). Conducted by Grameen Foundation in Lagos, the three-day workshop attracted 17 LAPO staff members from the head office in Benin City, along with the Coordination office in Lagos and area offices and branch operations.

LAPO had been using a poverty estimation tool to target clients and provide baseline data. However, this tool was not standardized. LAPO decided to adopt the PPI because it provides an objective assessment of clients’ poverty status aligned with the Nigerian poverty line. In short, LAPO wants to use the PPI to monitor outreach, track clients’ progress over time, and potentially incorporate PPI data into its marketing and business development activities. The goal is to better understand clients’ satisfaction and improve or expand its products’ value to its clients.

As the Regional Microfinance Programme Specialist for Plan International in Asia, I have learned first-hand the top challenges faced by microfinance institutions in accepting—and implementing—the PPI as their poverty assessment tool. My observations led me to create the ten challenges I outline here.

1. Simplicity is difficult to accept. For some people it’s difficult to accept simple solutions. The PPI as a simple tool raises some barriers which makes its acceptance difficult.
   
   
2. Can poverty be measured with 10 questions? A lot of people have asked this question. The PPI uses 10 non-financial, verifiable indicators to measure poverty. It must be explained that these are proxy indicators with attached values and a poverty look-up table to score those values--to measure the likelihood of poverty each score indicates. In summary, the PPI consists of 10 proxy indicators with scores attached to values measured by poverty likelihood tables. So the PPI is NOT just 10 questions.
   
   
3. The gaps between PPI results and the results from an MFI’s own poverty measurement tool raise questions. Mostly MFIs are surprised to see the gap between PPI results and the results from their own poverty measurement tool. The PPI measures poverty for different poverty lines, e.g. national poverty line, food poverty line, US$1.25/day PPP, etc. Before an MFI compares PPI results with the results of its tool, it must find out where its poverty tool fits in terms of poverty line(s). Does the MFI’s poverty tool measure poverty for the national poverty line or US$1.25/day PPP? You need to compare apples with apples.
   
   
4. Strong ownership by the MFI for its own poverty measurement tool. Some MFIs are reluctant to abandon their own tools although they know that the responses to questions are inflated, and the results are not accurate due to the subjectivity and non-verifiable nature of the questions.
   
   
5. The PPI is developed from an old (2 or more years) national socio-economic survey. So people think that the PPI is not reflective of the current situation. But the old national survey is the latest available survey and, in the absence of new national survey, the PPI can’t be revised. Remember that the government is also using the results of the old national survey for its own purposes, which means it is still highly relevant.
   
   
6. The PPI doesn’t fit with all extreme situations. Just like any other tool. People like to think about extreme situations in general to demonstrate that the PPI doesn’t work in these extreme cases. But, like any other tool, the PPI is not perfect; there will always be exceptions (outliers). But such exceptions will always be a tiny percentage and it’s immaterial to worry too much about them. The impact of such extreme cases on the accuracy of the results will be almost none.
   
   
7. Top management and board lack understanding of the PPI. It’s key for top management and the board to develop an appropriate understanding of the PPI. The MFI should make a systematic effort to build this understanding; if they do not understand, they will not commit.
   
   
8. Social performance is just a talk and not the walk. The PPI supports MFIs in achieving their social missions. But in the case of some MFIs, achieving their social mission is limited to talk only without serious actions.
   
   
9. The MFI lacks the capacity to interpret PPI results. Often PPI results don’t match the expectations of the institutions. The MFI must be clear when it interprets the PPI results. For example, the MFI needs to break down a consolidated result like “30% of clients are below the national poverty line” into loan cycles as financial services may help reduce poverty of clients in higher loan cycles.
   
   
10. How does the PPI make a business case? There’s a need to develop evidence that shows how the PPI contributes to the reduction of over-indebtedness, increases profits, expands market share, etc. Research and case studies should demonstrate that the PPI is not limited to social performance only but is also vital for pure business, which it is.

Muhammad Awais is a guest blogger on the Progress Out of Poverty blog. As the Regional Microfinance  Programme Specialist 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.

Last August, my colleague Babacar Sambe and I set out in earnest to plan Grameen Foundation’s first deployments of the Progress out of Poverty Index (PPI) in Sub-Saharan Africa (SSA). After analyzing the landscape, considering budget constraints and the location of local GF staff, we decided to begin our first efforts in Mali and Senegal. Rather than go it alone, we reached out to other international NGOs that support poverty-focused microfinance institutions (MFIs). And to round out our collaborative group, we invited other important locally based constituents-- namely a microfinance rating agency and the national associations of both countries. Our group of PPI supporters was formally branded the PPI Users Collaborative in Africa, otherwise known as PUCA (pronounced PUCK –a). PUCA includes Catholic Relief Services, Grameen Foundation, Oikocredit, Terrafina Microfinance, Planet Rating, and the national associations – APSFD Senegal and APSFD Mali.

Our intent was to go slow and steady – selecting the right MFI partners, training local staff and consultants, and engaging the national associations strategically as we moved along. We formally began our journey together in February of this year with three MFI partners of the international NGOs – two from Senegal and one from Mali – that are committed to managing their social as well as financial performance. Of the three, two have their completed pilots and one is very well-positioned to start its implementation.

Beyond working with these three partners, PUCA has expanded the number of local staff and consultants trained in both countries. At the beginning of 2010, there were five local PPI trainers across the two countries, and now there are 11. We pushed beyond the early boundaries we’d set for ourselves – hosting trainings in Mali and Senegal – by supporting APSFD Senegal’s trainer, Absa Gueye, in her first PPI training in English outside of her homeland. This event made APSFD Senegal the very first national association in the world to offer a retail-priced PPI training outside of its borders.

At the start of the year, Senegal was the only country in SSA to have had a GF-led PPI training. Six months later, a total of four trainings have been held in both countries – two in Senegal and two in Mali. Each collaborative member of PUCA now has staff with good knowledge of the PPI and their training capacities are still being strengthened. The PPI has been introduced to a total of 7 MFIs. Of the four that are not currently a part of PUCA, three have expressed interest in piloting the tool and preparations are being made to work with these institutions in the coming months.

It feels like PUCA has been around for a long time, but as I sit here and count I realize it’s only been 11 months since our formal launch and a year since all members committed to its creation. Are we moving too slowly or is 11 months a long period of time? We had expected that our three original MFI collaborators would be in the process of completing their implementation strategies by now, but things have moved more slowly than anticipated, largely due to unforeseen personal tragedies and a few life-changing blessings affecting SPM project leads. As life events arise, we’re reminded that there is only so much planning that can be done. So, in those moments, we’ve taken deep breaths and provided emotional support to our colleagues.

As I think about the ecosystem we’re trying to build, I ask myself, “Have we gained enough traction and interest this year? Have we built out a sufficient support network for both MFI users and trainers?” I think the jury is still out. Using the PPI is a process and it is as much about managing change as it is about assessing poverty outreach and measuring improvement in clients’ lives. So perhaps the next year will be more telling for PUCA as we wrap up our initial implementations and begin work with a new batch of MFIs. We’ll see if the slow-and-steady approach does in fact win the race.

Sharlene Brown is a Program Officer with the Grameen Foundation Social Performance Management Center, handling trainings for MFIs in Sub-Saharan Africa and Middle-East/North Africa. Sharlene is based out of Washington, DC.

During its past fiscal year, Grameen Foundation’s Social Performance Management Center actively pursued its primary goal—to grow the use of the Progress out of Poverty Index (PPI) around the world. Our success is measured both in the number of new PPIs created (10) and updated (6), and the number of new microfinance users (43). The cumulative result at the end of the fiscal year: 27 PPIs and 73 PPI users, serving about 5 million clients.


It was also a year of building partnerships and sharing experiences that enriched the use of the PPI everywhere. We learned lessons about how to be more efficient and effective in expanding the tool, and how to collaborate with microfinance networks to leverage that growth. Here are some highlights from the year:

• • We carried out our first global survey of PPI users and found that 83 percent of respondents were using the PPI after completing their pilots, and 47 percent were repeating collections in order to track poverty indicators over time.
• • We beta-tested and piloted a new data management tool to help microfinance institutions collect, analyze and manage PPI data.
• • We developed relationships with microfinance networks and national microfinance associations, resulting in 12 partnerships. Working with three partners in sub-Saharan Africa, we created a new model for training PPI trainers.
• • We assisted in the development of local and national peer learning communities.
• • We continued to create case studies and web tools to share best practices about PPI use.
• 
  

Visit our Case Studies & Papers page to download/read the entire annual report.

http://www.progressoutofpoverty.org/casestudies 

Steve Wright is the Director of the Social Performance Management Center (SPMC) at the Grameen Foundation. Prior to joining us,  Steve was the Director of Innovation and Technology at the Salesforce Foundation. Steve has also been a high school administrator and teacher as well as being a Peace Corps volunteer in Micronesia. He is based in Oakland, CA.

APSFD Senegal, in collaboration with Grameen Foundation, successfully completed a four‐day PPI Training of Trainers (ToT) workshop for 16 participants in Nairobi, and received positive evaluations with strong “pasha moto”, as Sharlene describes in her blog above.

Because of its social performance management (SPM) promotion plan along with its interest in working as a leader of SPM in Africa, APSFD Senegal was given the opportunity to test its training services abroad for the first time, generating extra income for the association. Sharlene and I provided an overview of global SPM trends, underscoring the importance of social performance for the sector, social investors, and for individual MFIs. The training session allowed leaders of MFIs interested in social performance and the PPI to ask questions and share experiences with other invited organizations like Microfinanza and KEEF. Overall, the participants had a good experience and appreciated the level of engagement the workshop offered. This kind of partnership will be duplicated in the future in other countries.

We are now moving forward in supporting the institutions as they lay the foundation to implement PPI, and a Google Group is set up to aid sharing and provide feedback.

I was excited to test the first experience of the PPI training in English, a third language for me. I was skeptical at the beginning but felt pretty confident at the end, due to the help of my young, winning team (Sharlene and Donald Bodzo) and the nice environment in which we have been working with the participants.

Ndeye Absa Gueye is the Manager of the MISION 2 Project – Social Performance Management in Senegal. MISION is a program of Catholic Relief Services in Senegal. APSFD Senegal is dedicated to coordinating the activities of the project and promoting SPM and the PPI in Africa.

Whenever I ask participants in a PPI training if they are interested in establishing a PPI peer learning network, everyone says yes. Then very few follow through.

The purpose of a peer learning network is to further develop MFIs’ understanding of the PPI through knowledge management and experience sharing. I have encouraged the establishment of PPI peer learning networks in three countries:

- Cambodia
- Pakistan
- Bangladesh

Mostly the networks consist of those who participated in the PPI Training of Trainers (ToT) workshops organized by Plan as well as those who have attended any other PPI-related activities and shown interest in joining the learning networks. For Cambodia, a Google group platform is used as the medium; for Pakistan and Bangladesh, a Yahoo group platform is used. In my opinion, the Pakistan PPI Peer Learning Network is the best case.

The Pakistan PPI Peer Learning Network was established with the consent of all PPI ToT participants in March. The network started with a very loose structure; for example, no coordinator was elected among the members, there was no action plan of the network, etc. When we reviewed the performance of the network in June, the members found that it did not meet their expectations. I shared the idea of electing a member as network coordinator (one willing to work without any financial or non-financial incentives) and to introduce some structure to the network. I suggested that, in order to strengthen the ownership of the PPI among its users, the network coordinator should be someone from an MFI. Rahmat Ullah from Akhuwat volunteered to take on the coordinator role with the full consent of all members. Akhuwat also cited the need for a refresher training on the PPI Intake Tool (a PPI data management system developed by Grameen Foundation). Rafia Naqvi rom Asasah agreed to provide the refresher training on the intake tool for Akhuwat.

The key task of the coordinator is to increase the mutual engagement of members. Mr. Rahmat, a man with a lot of energy, quickly initiated activities to get members more engaged. Most interesting was the identification of ten advantages that using the PPI gave to MFIs. The members’ engagement and contributions clearly grew after Mr. Rahmat took up the coordination role.

At that point, I realized that some formalization of the network had resulted in strengthening it. So during the 2nd Phase PPI planning meeting in September, I suggested that the network could come up with a realistic annual action plan. We all agreed to identify three key activities to be accomplished as part of action plan i.e. 1) Translate the PPI into Urdu (national language) so that all MFIs can use one single PPI; 2) Develop a PPI instructional manual in Urdu to be used by data collectors; 3) Have each MFI share a brief, quarterly progress report on PPI implementation, which will be consolidated into a single report.

So far the network has successfully translated the PPI into Urdu, thanks to Aziz Rehman from Plan Chakwal. An instruction manual has been developed and shared with the network, thanks to Asad Ullah Rashid from Akhuwat. I am anxiously awaiting the quarterly progress report.

The takeaway here is that a structured network can work better than a loose network. I will continue to follow the progress of the Pakistan PPI Peer Learning Network in order to share future learnings.

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.