Progress Out of Poverty Index: An Overview of Fundamentals and Practical Uses

Helping MFIs assess client poverty and manage social performance

This presentation gives an overview of Progress out of Poverty Index (PPI), a client poverty assessment tool which provides social performance data and enables MFIs to manage social performance. It analyses the role of PPI in the social performance framework, explains the construction and scoring technique of PPI and illustrates its benefits to management through a case study.

The PPI is created by analyzing data from a representative income/expenditure survey and ranking indicators that strongly correlate with poverty. The indicators are tested and vetted with local MFIs and representatives to ensure highly accurate results.

NWTF Philippines, one of the largest MFIs in the Grameen Foundation network, used the PPI to facilitate entry of the poorest clients by changing eligibility requirements and adjusting loan size, cycle period and pre-payment options. The presentation identifies the following benefits of PPI:

Easy to use, inexpensive, transparent and objective;
Practical and accurate;
Applicable to any program serving the poor;
Provides timely and accurate social performance information that enables management to target its clients better and respond to competitive pressures.