Beirut - May 2009 The Human Impact: Measuring Changes in Clients’ Lives Jeff Toohig Deputy Director, PPI Deployment Sanabel 6 th Annual Conference Grameen Foundation on Behalf of Grameen Jameel

1. Social Performance Management 2. What’s the Progress out of Poverty Index? 3. What does PPI Data look like? 4. How can PPI data be used? 2

Social Performance Management 3 Serving Poor Better Better Information Better Decisions More Accountability Better Management

Our Perspective on SPM Grameen Foundation mission: to enable the poor, especially the poorest, to create a world without poverty To get there, we must –Help our partners achieve social goals –Promote transparency and accountability –Measure what we value

Progress Out of Poverty Index™ (PPI) An objective client poverty assessment and targeting tool, which: –Provides social performance data –Enables MFIs to manage social performance An inexpensive and easy to collect scorecard –Derived from representative national household income and expenditure surveys –Comprised of simple, non-financial indicators 5

PPI within SPM Context By tracking poverty levels against other client data, make key decisions about mission and how to carry it out Managing social performance is based on –1 ) setting clear social goals and objectives –2) collecting information to monitor progress towards these objectives –3) using information to improve operational and strategic decision-making. Part of a social performance management system that helps advance an the mission. 6

7 Objectives of PPI Use Understand poverty levels of clients… …And change in those levels Measure outreach Use poverty level data to improve products and services

What does the PPI look like? 8 SAMPLE

PPI in Action 9

Indicator Possible response PointsTotal 1. How many people aged 0 to 17 are in the household? Five or more0 Four4 Three8 Two13 One20 None27 2. What is the household's principal occupation? A. Labourers (agricultural, plantation, other farm), hunters, tobacco preparers and tobacco product makers, and other labourers 0 B. Others8 C. Professionals, technicians, clerks, administrators, managers, executives, directors, supervisors, and teachers 14 PPI Fundamentals: Basic use 10 Client Response 8 0 IndicatorsPoints

Indicator Possible response PointsTotal 1. How many people aged 0 to 17 are in the household? Five or more0 Four4 Three8 Two13 One20 None27 2. What is the household's principal occupation? A. Labourers (agricultural, plantation, other farm), hunters, tobacco preparers and tobacco product makers, and other labourers 0 B. Others8 C. Professionals, technicians, clerks, administrators, managers, executives, directors, supervisors, and teachers Is the residence all pucca (burnt bricks, stone, cement, concrete, jackboard/cement-plastered reeds, timber, tiles, galvanised tin or asbestos cement sheets)? A. No0 B. Yes4 4. What is the household's primary source of energy for cooking? A. Firewood and chips, charcoal, or none0 B. Others5 C. LPG17 5. Does the household own a television? A. No0 B. Yes6 6. Does the household own a bicycle, scooter, or motor cycle? A. No0 B. Yes5 7. Does the household own a almirah/dressing table? A. No0 B. Yes3 8. Does the household own a sewing machine? A. No0 B. Yes6 9. How many pressure cookers or pressure pans does the household own? A. None0 B. One5 C. Two or more9 10. How many electric fans does the household own? A. None0 B. One5 C. Two or more9 Total : PPI Fundamentals: PPI score

PPI Fundamentals: Poverty likelihood 12 PPI score of 31 Poverty Likelihood The client interviewed has a 78% likelihood of falling below the national poverty line and a 22% likelihood of being above it. PPI Score Total Below National Poverty Line Total Above National Poverty Line %0.7% %7.5% %8.1% %6.6% %22.4% %23.2% %22.2% %51.4% %51.7% %66.4% %65.6% %77.4% %89.9% %89.9% %93.1% %96.2% %97.9% %100.0% %100.0% %100.0%

PPI Summary Easy-to-use, inexpensive, transparent, objective Estimate likelihood that a household is poor: –Scores work for targeting –Average all clients for portfolio poverty rate –Track over time for progress out of poverty Practicality and accuracy –One page, few indicators, simple (whole number) scores –Work in the field on paper in real time (no software required) Valid for any program serving the poor, not just microfinance 13

How are PPI data used?

PPI Case Study: ESAF 15 Initial Findings Results of Below $1.25/Day/PPP ESAF Rural Kerala households: 39.7% Compared to: Average for all rural Kerala households: 34.1% ESAF operates within, Kerala, Maharashtra, Madhyapradesh Jharkhand, and Chattisgarh, with 96 branches and 241,788 clients.

PPI Case Study: Fonkoze 16

Rural Vs Urban Entering Clients Urban/RuralSampleBelow National Below $1/Day/PPP Below $2/Day/PPP Rural31630%45%92% Urban10012%17%75% Grand Total41626%38%88% State Average (Rural)20%25%85% State Average (Urban)20%16%57%

Age and Poverty Entering Clients Age RangeNum Below $1/Day/PPP Below $2/Day/PPP 18<Age< %89% 25<Age< %90% 35<Age< %85% Age > %81% Grand Total %88%

PPI Case Study: NWTF NWTF in the Philippines –PPI collected in all branches, every client –Collects additional indicators to refines outreach and products and services –Compares data by branch to understand what products and services are most effective Outcomes –Changed targets to admit 90% below poverty line new clients –Adjusted loan size, loan cycle period and possible pre- payment options 19

Data Use and Future Opportunities –Link Social and Financial performance assessment –Demonstrate ‘blended’ results to donors and investors –Market to Social Investors –Disseminate results at all internal levels –Disseminate results to the industry –Potential staff incentives input 20

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Progress Out of Poverty Index™