CASHPOR Micro Credit Social Performance and Impact Theme 4: Since 2004, we have proactively measured our impact on poverty in terms of the progress out of poverty by our mature clients, which as of December 2008 was two-thirds. 1

We actively strive to measure Clients’ Progress out of Poverty CASHPOR Housing Index CASHPOR measures poverty at baseline for every new client ABN AMRO Impact Assessment Survey, % of mature clients had moved out of poverty 58% had significant decline in poverty M-CRIL, 2005 Overall social Rating of α by M- CRIL in 2005 α+ for depth of outreach which signifies “Strong adherence to social mission and systematic application ”. RBS Survey % Mature clients have moved out of poverty (National Poverty Line) 50% of mature clients no longer poor (US $1/ day) PPI Measurement as a Policy From FY 2010, Internal audit team to use the “Progress out of Poverty Index” on randomly selected clients to determine CASHPOR’s impact on poverty 2

ABN-AMRO Survey 2004 MethodologyFindings 200 Mature clients were surveyed Mature clients were defined as those who had taken 4 or more annual loan cycles 58% of the survey sample experienced a significant decline in poverty 41% had come out of poverty 78% of clients who had borrowed moderate amounts ( <INR 30,000 each), and invested it to cultivate agricultural land, experienced a significant reduction in poverty levels. 3 A study jointly conducted by ABN AMRO and CASHPOR to assess the impact of microfinance services on Poverty.

M-CRIL Social Rating – August 2005 GradeSocial Rating DescriptionGradeSocial Rating Description ++ Excellent adherence to social mission and values β+ββ+β Satisfactory adherence to social mission and values +-+- Strong adherence to social mission and values β-ϒ+ϒβ-ϒ+ϒ Weak adherence to social mission or values, no social mission of values 4 CASHPOR was rated  assessment- “Strong adherence to social mission and values” by M-CRIL on the following parameters ParametersResults Social Mission and Systems Alignment Clear and targeted social objectives Strong poverty targeting approach, integrated with monitoring and staff incentives OutreachOperations in backward and underserved regions Deep outreach to the poor (below $1/day at purchasing power parity) to the structurally poor ( Scheduled caste/Scheduled Tribes) Appropriate Services Timely credit on low interest KEY- MCRIL Social Rating Source: MCRIL Credit and Social Rating Report 2005

…and RBS Impact Survey 2008 MethodologyFindings mature clients surveyed ( 5 loans over four years) 2. Progress out of Poverty Index (Grameen Foundation, USA) A ten question tool Covers housing and land holding, household assets owned, age profile of household members, occupation etc 3.Questionnaire covering: Types of income, cash or kind Number of household members dependent on the earning members Sources of income and use of the loan funds Effects of life cycle events and shocks Social empowerment and education of children – 1.2 out of 3, a likelihood of 66%, of the mature clients are no longer poor, according to the Indian National Poverty Line. 2.50% are not poor according the the international severe poverty-line of US1/day (PPP). 3.On an average each household added at least one new earner after the loans 4.More than half the households added at least one more source of income after the loans 5.Petty trade, not livestock, farming or labour, is the most common important source of income for microfinance borrowers income generating activities combined with borrowing more than INR 75,000 over four or more years is the most effective means of moving out of poverty. 5 A study by RBS along with CASHPOR, in the attempt to answer the question: “Is the continued use of microfinance positively and strongly associated with poverty- alleviation?”