Using Poverty Measurement Tools to Meet Client Needs

MFIs that employ poverty measurement tools and use the data to adapt their products and services to better meet the needs of those living in extreme poverty soon find the number of poorest clients they reach going up. In 2010, the Microfinance Council of the Philippines, Inc., and Grameen Foundation began work to expand use of the PPI with 10 of the leading MFIs in the Philippines. As they applied this tool to measure the poverty levels of their clients, they found that they were not serving as many clients living in extreme poverty as they had believed. They spent the next few years redesigning their products, services, and systems to ensure that those in extreme poverty could access and make good use of them.

The numbers reported from the Philippines (bottom line in figure 2) show the results of this work. Total poorest clients declined from 2.2 million in 2010 to 1.6 million in 2011, as the PPI reported more accurate results, and then grew to 1.9 million in 2012 as the revised products and services began attracting more people living in extreme poverty.

Julie Peachey, director of the Social Performance Management Center atĀ Grameen FoundationĀ , explains the process of employing the PPI to assess and improve poverty outreach2.