Use of Poverty Measurement Tools
The Microcredit Summit Campaign’s greatest challenge lies in bridging the gap between our commitment to reaching the poorest families and the lack of a sufficient number of quality poverty measurement tools in use.
Beginning in 2000, the Campaign asked practitioners to indicate what poverty measurement tool they used, if any, to target or identify poorest clients. Of the institutions reporting that year, 67 percent (341 out of 512 institutions submitting an Action Plan in 2000) reported using a tool other than an estimate. This year, of the 172 MFIs that submitting an IAP, 111 or 68 percent, reported using a poverty measurement tool other than an estimate. In order to estimate the poorest outreach from the MIX database (because this data is not supplied by the MIX), we applied the country average for the percentage of total borrowers that were among the poorest from MFIs reporting to us.
Progress out of Poverty Index (PPI)
The Progress out of Poverty Index® (PPI®) is a client poverty assessment and targeting tool that provides objective poverty-level data for organizations to use within their social performance management system. It is an inexpensive and easy-to-collect scorecard (10 questions) that assesses simple, non-financial indicators. The Grameen Foundation, in collaboration with CGAP, the Ford Foundation, and other donors, commissioned Microfinance Risk Management, L.L.C. to develop PPIs globally. The PPI provides information that enables users to better understand their clients’ needs and evaluate the effectiveness of their programs and products. In the past five years, the Grameen Foundation, in partnership with global and regional microfinance networks and industry leaders in the social performance community, has offered training, resources and support to promote adoption of the PPI. Currently, Grameen Foundation is aware of 106 different organizations globally using the PPI.
The Poverty Stoplight, developed by Fundación Paraguaya based in Asunción, is both a metric and a methodology for families to quantify their level of poverty and identify customized strategies to address specific deprivations. It defines what non-poverty means across six dimensions – Income and Employment, Health and Environment, Housing and Infrastructure, Education and Culture, Organization and Participation, and Interiority and Motivation. These dimensions are operationalized into 50 indicators, each with three simple definitions: what it means in the local context to be extremely poor (red), poor (yellow) and non-poor (green).
Indicators are visualized through pictures so that families can self-evaluate their level of poverty by selecting the image that best represents their situation. Because it uses simple definitions and is intuitive, the Poverty Stoplight can be adapted to various contexts and settings. It has been adapted and used in over 18 countries in Africa, Latin America, and Asia. At the same time, because it is a metric that collects information at the household level, it can be used to complement different indexes that usually lack real-time data.
By geotagging client responses into a heat map the Poverty Stoplight facilitates the development of strategic partnerships with governments, the private sector, and other NGOs to leverage resources and enable the delivery of solutions tailored to the needs of each family.
USAID Poverty Assessment Tool (PAT)
The USAID Poverty Assessment Tool (PAT), is a short and simple household survey (albeit typically a bit longer than the PPI) used to measure the prevalence of poverty among a population. Each PAT includes a short, country-specific survey (10–25 questions) that takes less than 20 minutes to conduct. The survey collects a variety of information, including household member characteristics, housing conditions, and ownership of durable assets. The data gathered from these surveys is then entered into a data-entry template, from which specific software (CSPro or Epi Info) processes the data to calculate simple statistics and estimates the share of households living below several poverty lines. The basis for the PAT surveys is 10 to 25 indicators that have been identified as the best predictors of the poverty levels.
These indicators were selected with statistical methods from a large pool of potential indicators derived from data from nationally representative household surveys. PAT implementers are supported by a wide variety of free resources, including country-specific user guides, an implementation manual, in-person and online trainings, an online forum and a help desk. As of September 2011, PATs are be available for 37 countries; currently 25-30 organizations are using them.
CASHPOR House Index
Participatory Wealth Ranking (PWR)
Additional Tools Campaign Members Use
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