Poverty Measurement in Microfinance: Poverty Outreach Results in the Philippines

Poverty Measurement in Microfinance: Poverty Outreach Results in the Philippines

December 7, 2012 at 4:44 PM - by Leah Gage - 0 comments

In case you missed today's webinar on PPI outreach in the Philippines with Christopher Tan, here's an overview of what he discussed.

Christopher Tan, or Happy as he is most often known, is the Grameen Foundation Regional CEO for Asia. During today's webinar he presented the findings from the 2012 Oikocredit-commissioned report Poverty Outreach of Selected MFIs in the Philippines, available for download here. Reiterating many of the points made in a previous interview with Steve Wright, Happy explained the importance of PPI for performing social performance due diligence to quantitatively verify poverty outreach against MFI targets, and to protect against a tendency of MFIs to go after easier-to-reach clients, especially in saturated microfinance markets like the Philippines.

The findings of the study show that most MFIs surveyed are reaching poor clients, though not as poor as the MFIs had predicted. This slide here shows that while roughly 80% of each MFI's clientele are living below $5 per day, concentration of clients reached who fall below the Philippines National Poverty Line vary between 18% and 40% of total MFI clientele.

This comprehensive study raises the question - as was raised during today's webinar - what's next? Will MFIs use these results to increase their outreach to poor and very poor potential clients? Happy explained that one MFI - an Oikocredit partner - is now using the PPI scorecard to screen new clients. If a potential client scores too "high" - or is not "poor enough" - they will not be chosen as a client for that MFI. Other MFIs he explained are using the data to cluster their clients by PPI score in order to analyze the repayment power of poor clients. According to Happy, preliminary results have shown that clients with a "low" PPI score - those considered poor or poorer - are actually showing to repay and save at greater rates.

For more information about the PPI, please visit www.progressoutofpoverty.org and check out the other blogs in our Microfinance Investor Education Series.

Christopher “Happy” Tan is Grameen Foundation’s Regional CEO for Asia.  He is responsible for defining and executing GF’s long-term strategy, and overseeing its various innovation and replication projects in the region.  He has over sixteen years of experience in development finance, nonprofit management and public interest law, having worked for ShoreBank Advisory Services and the Local Initiatives Support Corporation in the United States and SALIGAN in the Philippines.  He holds an MPP from The University of Chicago and a JD from the Ateneo de Manila University.

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