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.

The Microfinance Information Exchange (MIX) has acted as a real champion for social performance in past years as a data warehouse for microfinance institutions. They have helped lead the industry effort to create a set of social indicators through the Social Performance Task Force and have just recently revised the list.

We're very excited to help spread the word that the MIX has just recently updated its online platform to display social performance data for MFIs along with its financial performance information (you can view a sample of NWTF's data display below). We commend the MIX for its efforts and are pleased to see that it continues to innovate and promote effective double-bottom line practices.  MFIs using the PPI and reporting to the MIX are integrated into this new display and in the coming months we hope to announce how the MIX will indicate PPI Certified institutions in the new display.

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.

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.

In June, three PUCA (PPI Users Collaborative in Africa) members– national association APSFD Senegal, along with Catholic Relief Services (CRS) and Grameen Foundation – excited about the success of the dual country training events in Mali and Senegal, began to discuss the possibility of a unique opportunity for APSFD Senegal. The association is the flagship partner of CRS’ Mision II Afrique social performance management initiative and has primarily focused its attention on educating and supporting its in-country members interested in better understanding and managing their social performance. We jointly explored the feasibility of APSFD Senegal offering a PPI training of trainers outside of its borders using a retail pricing model where each participant paid a registration fee. This would be the first time that such an offering would be made in Africa, and we’ve learned that it is the first time in the world that a national association has hosted a training on the PPI using this retail pricing approach outside of its borders. Elsewhere in the world, national associations have sometimes been asked to consult for specific organizations and train on the PPI, but the initiative and pricing approach taken by APSFD Senegal in this case is unique.

In its inaugural PPI training outside of Senegal that began today, APSFD Senegal will train 9 institutions and 16 participants from Uganda and Kenya. Absa Gueye, APSFD’s social performance manager and the lead trainer for this Training of Trainers (ToT) is joined by me and GF Fellow Donald Bodzo to observe and support this first-of-its-kind event. Attendees include staff members of AMFI Kenya, a national SPM association, several Kenyan MFIs, Microfinanza, international NGOs Catholic Relief Services, Stromme Foundation and Oikocredit, and staff from a software company and microfinance consulting firm. This retail pricing approach has brought together an interesting mix of individuals seeking to learn more about the PPI for different purposes and should lead to an engaging learning exchange.

I am personally excited about this event and the foundation we are laying for other national associations that are interested in including social performance trainings into their business models as a source of revenue generation. After the training, our hope is to document the learnings from our journey in making this experience a reality.

More to come on our experience over the next few days! Karibu Kenya!

***

The CRS Mision Africa is an initiative that provides intensive support for training, technical assistance and mentoring for a three-year period to build the capacity of national associations and AFMIN (African Microfinance Network), an association of microfinance networks in Africa.

PUCA is an innovative, two-year initiative designed to help African microfinance institutions effectively use the PPI. The initiative, the first of its kind in Africa, unites five charter partners—Oikocredit, Catholic Relief Services, Terrafina Microfinance, Planet Rating and Grameen Foundation—with the national microfinance networks APIM/Mali and APSFD Senegal.

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.

As the program officer responsible for PPI deployment in Sub-Saharan Africa and Middle East North Africa, I have the opportunity to meet people from many countries and help them to understand social performance management better. I also have the opportunity to help reshape their perceptions of an American. When I first began working with our West African representative based in Senegal, we had many phone calls, but he never realized that I am a woman of Caribbean descent since I have no accent. The Internet connection was rarely strong enough for video chat so he didn’t realize I have skin the hue of many people in Senegal. In fact, he came to the airport looking for a white American woman – a fact he later shared with me and we had a good laugh about. I sound American but to many Africans I could be one of them…until I open my mouth. I am perhaps a paradox – a self-identified Caribbean-American woman with no Caribbean accent working in development; I suspect there are few who could fit this description. 

 
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.

I think we can all agree that measuring the key metrics of our efforts helps us better accomplish our objectives. Well, what about assessing how well we are measuring those metrics?

I had the pleasure of discussing the release of a new set of PPI™ Standards of Use during the annual Social Performance Task Force meeting in Bern, Switzerland last month. To a certain degree, that was preaching to the choir. We had a tough time slot (after the last plenary of the day, at the same time as a cocktail party!), yet our meeting was very well attended by PPI users and supporters from all over the world. We had a great discussion, with lots of views heard. I’ve since heard overall very positive response to the establishment of PPI Standards. One PPI “super user” has already started planning to use the certification of its use of standards to help make decisions about how to support PPI users improve their integration of standards.

While the feedback was positive, the group had some question about the standards, and, even more so, about the certification process. Why hadn’t we told them before about the standards? What if organizations using the PPI were not ready to be certified?
With the official PPI Standards of Use press release going out today, I thought I’d address some of those concerns here and provide the space for a discussion. Please post any thoughts in the comments, and I’ll do my best to respond as appropriate.

One of the first issues seemed to me a natural confusion between the standards and the certification process. If, instead of the PPI, we think about learning French (which I’ve been trying to do ineffectually for the last two years…) the standard might be the ability to have a simple conversation at the market whereas the certification would be a test of those skills. We are thinking of these two things as obviously connected but still separate.

The standards are, well, just that - standards. We expect that PPI users as well as investors and donors who support PPI users will begin to think of the standards as minimum-use requirements. We’ll all be able to use the standards when training and planning PPI implementation plans. They’ll help new and experienced PPI users alike to identify areas for improvement. The standards are therefore a stand-alone resource. Of course, a related phase is to have some outside certification of the quality of PPI implementations. With the standards released, we are now in the process of piloting that certification process. After that pilot is completed, we’ll have better information about how much time is involved, any likely complications and other logistical concerns. Then we’ll open up the process to PPI users who want to volunteer to be certified. The certification will not be mandated. Or, I should say, it won’t be mandated by GF. I would guess that over time, as more and more PPI users are certified, there will be greater pressure to be certified. I think that is a positive long-term trend since it solidifies the value of PPI data for both management decision-making as well as for external reporting.

Look out for updates on the certification process and an opportunity for interested PPI users to sign up for certification. That’s coming later this fall.
We’ve enjoyed a significant amount of constructive feedback from our partners at all stages of PPI implementation. I hope you’ll continue to provide that feedback either directly or through this blog.

I’m really optimistic about this process as it should help at all stages of PPI implementation.

To view/download the standards go to: http://www.progressoutofpoverty.org/ppi-standards-use

To read the press release in English, French, and Spanish: http://bit.ly/PPI-standards

Jeff Toohig is the Deputy Director of the Grameen Foundation Social Performance Management Center. He is based in Washington, DC.

It’s Friday and it’s all coming to a close. Participants from FDEA and and MEC Feprodes are preparing their action plans—getting ready for their PPI pilots and ensuring appropriate allocation of time and resources for using the PPI. This is an incredibly important step in the process; we find that without action plans, many participants would return to their institutions, overrun with work, and PPI plans would lag. Action planning gives our trainees a chance to consider all the possible operational issues, resulting in a draft plan to take back to their executives and to talk over with their field officers. Together management and staff can then understand the needs and costs of using the PPI. The planning process also results in strong commitments from more institutions to invest in social performance, an excellent way to wrap up our training.

This trip has been eye opening on so many different levels. It has given me a clearer understanding of how MFIs see the PPI and why they choose to use a poverty assessment tool. In poverty stricken countries such as these it is so important for MFIs to be able to be able to show they are mission aligned, to track their clients' progress out of poverty, and to reinforce the image of microfinance as an important tool in the fight for poverty alleviation. Lastly,  this trip has definitely reinforced the need to practice my French more when I return to DC.

West Africa may be very poor economically but the people are incredible, they are committed, and they are so generous with their time, their homes, with everything. Their “teranga” always comes through. Merci bien à tous, c’était un grand plaisir, a la prochaine!

To close, I'll leave you with a clip from our Executive Day in Bamako that was covered by Mali National Television (ORTM).

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

Today I took a short trip with Ali (Babacar's brother) and Andre Roland Youm, Director of Operations at Caurie MF, to Thies in west central Senegal. Thies is situated 35 miles 56 km) east of Dakar, a 90-minute drive from Saly, where we held our PPI Training and Executive session. Thies, one of the largest cities in Senegal, is an important transportation center. The junction of the eastern Dakar-Niger River railway and the northern rail and road systems is located there. So is Caurie Microfinance, one of the larger MFIs within the country.

Caurie Microfinance has a portfolio of 31,479 clients in 6 branches. It is one of three MFIs that have most recently completed a PPI pilot in Senegal through the PPI Users Collaborative in Africa (PUCA) and is a partner of Catholic Relief Services (CRS).Caurie MF is using the PPI to know their client base, to better target whom to reach, and to understand the poverty movement of those clients over time.

I met with Mamadou Lamine Gueye, the CEO of Caurie Microfinance to talk about why Caurie chose to use the PPI, what it has learned and what it is planning going forward. Check out the interview below!

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