Instilling Confidence in Poverty Measurement: The New PPI Certification (E-Workshop Recap)

Courtesy Grameen Foundation

Photo courtesy of Grameen Foundation

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The Microcredit Summit Campaign and Grameen Foundation recently co-hosted an e-workshop webinar focused the recent improvements to the Progress out of Poverty Index® Certification, as well as revisions to the Standards of Use. “Instilling Confidence in Poverty Measurement: The New PPI Certification” featured Frank Ballard of Grameen Foundation, Analí Oda of Planet Rating, and Aldo Mauro of MicroFinanza Rating and was moderated by Jesse Marsden of the Microcredit Summit Campaign.

During the engaging discussion, the presenters shared their knowledge and experiences as to how the renovated PPI certification can improve an organization’s measurement of poverty, enhance its reputation, build confidence in its practices, and attract mission driven investors and donors. For those unable to attend the webinar or for those interested in revisiting the material again this blog will present a brief recap of the discussion. In addition, as there were difficulties in connecting Aldo to the webinar, his thoughts on several key questions will be presented.

Changes to the certification process

Frank opened with a presentation covering the key components of the new process for PPI certification: the role of rating agencies and the Standards of Use. In contrast to the past, an organization seeking PPI certification must now do so through external rating agencies such as Planet Rating and Microfinanza Rating. These agencies play a crucial role as they collect relevant information, determine compliance and provide a results review.

The Standards of Use were updated as well to now include standards such as #16 (data are reviewed and cleaned before analysis) and #23 (poverty lines used for analysis align with the objectives of the organization). These new standards help to ensure both the accuracy of the PPI as well as its effective use in the field. With the basic introduction of the PPI certification laid out, the webinar then turned to an interview-style conversation between the panelists.

The benefits of PPI certification for practitioners

According to Frank, among the many benefits of PPI certification for practitioners, enhanced reputation and mission alignment, identification of areas for improvement, and differentiation from peers are important. Analí added that certification also increases confidence in the accuracy of an organization’s PPI data not only for the staff and management but it also bolsters trust among external stakeholders as well. PPI certification is valuable for networks and investors as well, and Analí noted that certification helps them to identify strong potential partners because certified organizations display a deep commitment to both understanding the poor that they work with and using poverty data to enhance products and services.

Planet Rating LogoThe conversation then moved to focus on rating agencies, where Analí observed that specialized rating agencies are best positioned for the task of certification as they are independent, respected, and experienced in assessment. Frank added that the role of Grameen Foundation throughout the certification process is one of promotion, recognition, and oversight. Frank also laid out the process, including the Self-Assessment Tool, which an organization may implement to prepare for the certification process.

MicroFinanza LogoUnfortunately, technical problems prevented Aldo from delivering his comments and insights out loud during the session, but we had a chance to catch up with him afterwards and he has provided some great go-to responses on key questions that arose in the discussion.

Why are external ratings agencies used for PPI Certification? Which agencies are fully licensed?

External rating agencies ensure that the assessment process is independent and transparent. Fully licensed agencies, such as MFR [MicroFinanza Rating] and PR [Planet Rating], have great field experience in assessing the PPI in different contexts and countries. The wide network of regional offices ensures a deep knowledge of the market of intervention.

What is the licensing process for rating agencies like? Are there other rating agencies in the process?

Licensed rating agencies support the development of the methodology as active members of the technical committees at the Grameen Foundation. They also carry out a pilot certification with the newly released standards to cross-check the methodology of the implementation process.

What is the role of rating agencies in the certification process? 

Rating agencies verify that the PPI is properly implemented at all organizational levels by applying the certification methodology approved by the Grameen Foundation. Verification is conducted both off site through desk review and on site with a field visit to the MFI offices and a sample of branches.

What are the benefits of being PPI certified for practitioners?

Higher confidence in the accuracy of the organization’s PPI data, identification of areas for improvement, increased trust among stakeholders, enhanced reputation and mission-alignment, and differentiation from peers.

For investors and networks, what are the benefits of practitioners that are PPI certified?

Increased trust among stakeholders, enhanced reputation and mission-alignment, and differentiation from peers.

How long does certification last? What are the time requirements? Cost? 

Two years. MFR charges €3,700 for a standalone and €2,580 if combined with a social rating or Truelift assessment.

Is certification only available to MFIs or to other organizations as well?

It is available for any organization or business with a mission to serve the poor.

The PPI is attractive because it is relatively simple and inexpensive, will the certification process negate this?

The PPI is attractive because it is a statistically sound and simple to use tool to measure poverty and can provide organizations with viable data for staff and management to make informed decisions. Additionally, it can provide stakeholders with objective evidence that the organization is reaching the poor and those vulnerable to poverty.

We encourage you to continue the discussion by posting questions or comments here. We will invite the presenters to respond.

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