Grameen Fdn expands our knowledge on poverty measurement

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Photo credit: Grameen Foundation
We are pleased to post an update from Grameen Foundation about the Campaign Commitment that they launched in 2014. Focused on supporting the growth of the use of a very effective poverty measurement tool, the PPI®, their Commitment also underscores the importance of using the data from tools like this in helping to improve the way we support and serve those living in poverty.

You can learn first-hand how such tools can be used, not just to prove that you are reaching the extreme poor, but to improve the services that you offer and the way you interact with the extreme poor. We are organizing a breakout session at the 18th Microcredit Summit called “Innovations in Measuring Social Impact.” Learn more and register today!


>> Authored by Julie Peachey, Grameen Foundation

In early 2014, Grameen Foundation made several commitments, as part of the Microcredit Summit Campaign’s 100 Million Project, towards achievement of the collective goal of helping 100 million families escape poverty. Our commitments focused on demonstrating use of the Progress out of Poverty Index® (PPI®) for measuring household-level poverty, because reaching and lifting people out of poverty requires knowing who is actually poor.

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We second that toast, Beth

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Medal of freedom Yunus_Alex Counts smiling
>>Authored by Larry Reed, Director, Microcredit Summit Campaign

Last week, Beth Rhyne posted a well-deserved tribute to Alex Counts, who recently retired as CEO of Grameen Foundation. I’d like to add to her thoughtful articulation of Alex’s contributions to microfinance and the lives of people living in poverty.

I once sat with Alex at a dinner in Dhaka that brought together many different strands of the Grameen family. Our table included several of the board members of Grameen Bank, women clients of the bank. They laughed at Alex as he talked with them in Bangla, and then let us know exactly what they thought about how the government was treating Prof. Yunus. As I watched their delighted conversation, I was struck with how it traversed so many traditional barriers of gender, age, caste, education, experience and income. It was just Alex and his friends, who were not only clients of Grameen but were also mothers, daughters, board members and business owners. He wanted to learn as much as he could from them.

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#tbt: What Happens When You Measure Your Clients’ Poverty Levels

Microfinance clients in the Philippines (December 31, 1997, to December 31, 2012). Check this out in the 2014 Report.

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The 2014 State of the Campaign Report features various actors in the microfinance sector that are taking steps to helping their clients lift themselves out of poverty. In this interview with Julie Peachey (director of social performance management at the Grameen Foundation), learn about how the Progress out of Poverty Index® (PPI®) can help organizations better target the poorest. Peachey provides examples of PPI usage as well as recommendations on how to best make use of the results provided by the tool. Below is a summary of the key points from the interview.


Julie Peachey, Director of Social Performance, Grameen Foundation

Julie Peachey, Director of Social Performance, Grameen Foundation

The Grameen Foundation developed the Progress out of Poverty Index (PPI) because they noticed that microfinance institutions were failing to meet poverty outreach targets, and, worse, there really wasn’t a good way to determine how poor clients actually were.

The PPI is a ten question survey based on a household’s income and expenditures, and it is available for 50 countries. The PPI allows an organization to measure in absolute terms how poor a client’s household is by calculating the likelihood that they are living below one of several poverty lines. Further, the PPI can be used by any organization that has a social mission to serve and reach the poorest.

The PPI can be used for:

  1. Targeting the very poor (those living on less than $1.25 a day) to make sure that they aren’t being excluded.
  2. Product design to make sure that poorer clients aren’t being excluded from the organization’s services based on the way their products are designed.
  3. Tracking progress over time to see if the client is becoming better off and moving out of poverty.

Generally speaking, Grameen Foundation has found that organizations that start using the PPI find that their clients are not as poor as the organizations thought and, as a result, that they aren’t actually reaching the very poor.

For example, at CARD Bank in the Philippines, the Grameen Foundation used the PPI to survey the poverty level of clients receiving a new product in order to determine what CARD needed to do to make the product viable. When they saw the product was not taking off as expected, they lowered the price and then experienced a great increase in clients opening up a new account. They then looked at the PPI score before and after the prices were lowered.

Before the change, approximately 27% of clients who opened an account were below the $2.50 a day line; after the price was lowered, CARD saw an increase in the number of clients opening an account as well as a 7-8% increase in the number of clients opening accounts that were below the $2.50 a day line. The conclusion is that lowering the price of the product made it more feasible to the poorer population.

Organizations are also able to use the PPI to calculate the percentage of very poor households in a given area they are serving. The Grameen Foundation conducted a series of “poverty outreach reports” that looked at “concentration, penetration, and scale, which allows an organization to really look more deeply into what the overall total percentage of poor people that are [being] served ideally to be able to see the progress over time.”


Relevant resources

#tbt: Excerpts from “Microfinance in India: A Way Forward”

CRECER clients

Photo credit: CRECER Bolivia

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We are pleased to bring you this #ThursdayThrowback blog post, which was originally published in Vulnerability: The State of the Microcredit Summit Campaign Report, 2013. It is particularly relevant with yesterday’s announcement of a Campaign Commitment launched by CRECER Bolivia. Learn more.


Read the full report here.

Grameen Foundation president and CEO Alex Counts has reflected on the recent crises affecting microfinance by thinking, reading, writing and interviewing people. He presented some of the findings in a talk given at the Sa-Dhan/FICCA Annual Conference in New Delhi in August 2012. These edited excerpts highlight the experiences of two institutions working in challenging, saturated environments, and how they overcame the difficulties.

First, let’s turn to Bolivia. If India’s microfinance sector was at its heyday in 2009, Bolivia’s was at a similar place 10 years earlier, in 1999. Well, within months of this moment in time, things went badly. A political movement against microfinance that included some dissatisfied clients, opportunistic politicians, and professional organizers accused MFIs of exploiting the poor by charging high interest rates and using coercive collection practices. Blockades were set up in front of MFIs’ offices, repayments plunged, and there was a general loss of support for microfinance in civil society.

One Bolivian organization was able to navigate the 1999–2001 crisis better than most: a non-governmental organization (NGO) called Crecer. During the crisis, their portfolio-at-risk rose, but not by much. Their staff and clients were often allowed to pass the blockades that were set up. The question is, why? My research has so far focused on four aspects of Crecer’s approach that enabled it to weather the crisis relatively unscathed:

  1. Once Crecer was consistently profitable, it began progressively reducing its interest rates and providing free life and accident insurance to its clients.
  2. Crecer promoted a client-centric culture that [ranged from] providing free nutrition and health education to calling its borrowers “members.”
  3. Crecer’s leaders resisted the encouragement of many to convert into a for-profit finance company because they did not feel it was consistent with their organizational purpose.
  4. They were active in FINRURAL, the [national] association of NGO-MFIs, and its work advocating for supportive policies. Crecer’s CEO often chaired FINRURAL’s board.
Crecer_DSC_2179_cr_comp

Photo credit: CRECER Bolivia

Let us now turn to Bangladesh. How was Grameen [Bank] able to thrive for decades in the face of stiff competition, unstable governments, and periodic bursts of religious fundamentalism? I see seven basic reasons that are relevant to the context in India:

  1. Constant tinkering with its products to create more value for clients
  2. Including active roles for clients in ownership and governance
  3. Promoting savings from its inception
  4. Placing strict limits on [compensation] for its executives
  5. Customiz[ing] credit products to fit the cash flow needs of clients (This was done despite the fact that it created major problems for the bank’s IT systems, as well as the need to retrain its staff.)
  6. Rather than “zero tolerance” [for missed loan payments], practicing what you might call “infinite tolerance” for legitimate cases of clients unable to pay according to the original schedule
  7. Creating a “balanced scorecard” for evaluating staff and branches, in the form of a five-star system, that included three measures of financial performance and two of social performance

[These are my reflections on] what might guide us from experiences abroad and what I think we should do going forward.

To read Alex Counts’ full speech, please visit http://bit.ly/U7T2Ug.

To learn more about Grameen Foundation, visit http://www.grameenfoundation.org.

Empowering communities one Esther at a time

Esther Chebet is a Community Knowledge Worker. She says, "It has made such a difference in my life. From a poor woman whom people say, 'Who is she?' to now, 'There is CKW!' I’m so proud to be a CKW and serve the community willingly."   Photo credit: Grameen Foundation

Esther Chebet is a Community Knowledge Worker. She says, “It has made such a difference in my life. From a poor woman whom people say, ‘Who is she?’ to now, ‘There is CKW!’ I’m so proud to be a CKW and serve the community willingly.”
All photos courtesy of: Grameen Foundation

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>>By Sabina Rogers, Communications and Relationships Manager

Esther Chebet is an inspiration to her neighbors. She is a valuable resource to her community, and they know it. Kids call out to her on the street: “CKW!” Men respect her knowledge and opinions. Women come to her for help fixing problems and resolving disputes.

With International Women’s Day on Sunday, March 8th, I’d like to take this opportunity to appreciate Esther and many women like her — community health workers in India who are working with ESAF to screen their clients for high blood pressure and health professionals in the Philippines who volunteer their time for Community Health Fairs organized by CARD MRI — who are on the front lines in the fight to end extreme poverty.

This is Esther Chebet’s story: one woman who is making a huge difference in her community.

A farmer in rural Uganda, Esther received training as a Community Knowledge Worker (CKW), from Grameen Foundation. She was the star of a webinar hosted by Grameen, telling her story and showing us how one woman can help create an economically empowered community.

She has multiple roles in her community in rural eastern Uganda: farmer, seamstress, volunteer domestic violence counselor, teacher and Grameen Foundation Community Knowledge Worker.

In her role as a Community Knowledge Worker (CKW), Esther visits her neighbors — a large number of whom are women — and helps them solve problems with their crops and livestock. She uses her mobile phone to access an agricultural database with information on relevant, local best farming practices, weather forecasts and market price information. This enables her neighbors to treat diseases like banana wilt and to get better market prices for their produce. As a result of this support, farmers are able to earn on average 38 percent more money from their crops. [1]

Below follows my attempt to capture the Q&A from her video chat, though answers are paraphrased.

Does work as Community Knowledge Worker (CKW) empower women?

Yes, it empowers women. In our culture, men used to say women were property. As a CKW, I’m a women’s right activist. I train women on their rights and they’re now doing things they never could before.

For example, before, women couldn’t take coffee to market. She could grow it but not sell it. Now with my training, women are going and selling their coffee. They’re now so happy. They say, “We sell our coffee, we show a receipt of that transaction.” They grow their own crops and sell it!

What is a typical day as a CKW?

I wake early at 5 AM, then I prepare breakfast for family. At 7am I visit my banana plantation and then feed my animals. After doing my housework, from about 2 PM to 5 or 6 PM, I go visit the savings group members and other people, educating them on what they can get out of becoming a savings group member or answering people’s questions about their farms. Then I come back to prepare supper and rest.

Can you tell a difference in your farm from your work as a CKW?

Yes, after I went through the training, I started gathering manure and built a system of preserving water. Now my banana trees are always green because I always have water for them. Production is up.

Can you give an example of a woman you helped?

I helped a woman who came to me because her poultry were getting sick.

She said, “I hear you’ve got information.”

“Yes, I have; what is the problem?”

“My poultry are doing poorly and my hen is dying.”

I told her to use seltzer water and aloe vera; she did that and now the poultry is doing fine. Then she shared this information with other women who are planting aloe vera for their use.

One man asked me about spacing of coffee. We did a demonstration with him at his plantation. This year, he’s going to have so much coffee.

What is the problem you see most frequently on your neighbors’ farms?

The main thing is a banana bacteria wilt, but through my help as CKW, it’s improving. We, my community, worked together to cut down every affected plant, and now there is no more affected plant. Plus, every farmer knows that it if happens, if the bacteria comes back, it’ll be bad for him, so immediately, they cut down the affected banana tree.

How were you selected to be CKW?

I was elected by my neighbors. Three of us were nominated for election: 2 women and 1 man. We were sent out of the room so they could talk about us, and after about 5 or 10 minutes, they called us back in. They said, “We choose Esther.”

When I was elected, I was happy! They said, “We selected Esther because she is confident, she can speak to many people, and she is willing to serve the community.” Most of the time, I speak the truth. So that is why I was elected. Without knowing exactly what I’d be doing, I was so happy that I would be serving community members. Willingly!

What’s the most interesting thing you’ve learned as CKW?

I’ve learned the correct amount of manure to use as fertilizer. I’ve also learned how to make my own drugs for treating my animals, plants, and many other things. I make insecticide for my plants and vegetables using local ingredients.

Esther's daughter with avocado

Tell us about building a barn for your cow. You said you got a lot more milk when you built the barn.

Since I built the barn, the cow stays dry and warm when it rains. Since then, the milk production has increased to 5 L in the morning and in the evening 4 L. I sell each liter at 1,200 Ugandan shillings. I sell the morning milk, and my family drinks the milk from the evening.

What is your biggest challenge as a CKW?

Farmers don’t adapt to the message quickly. Among 20 farmers who saw example of a granary I built, only 6 started doing it. They ask for the information, but they see it is hard to use it and some don’t persevere. But, when farmers who keep at it and it works for them, they give testimony of it working and tell others to go talk to Esther

Also, sometimes people neglect you because you’re a woman. They say, this is information for men.

When you train men, do they ever resist information just because you’re a woman?

Esther's manThey like it, but mostly, the people who accept the information are women. Then women tell them, “This is good information from Esther.” Then the man or the husband can come and ask, “Is it true this information?” I say, “Yes, it’s true; I came to your home and talked to your lady.” Then the men ask for more information.

I’m now in my third year of being a CKW, and people are more accepting than they were at the beginning. Men are now coming to trust me; coming to me to ask for information.

How do other women in your community feel about you being a leader?

They feel good because of the information I can give them like women’s rights and creating a savings and credit group. Women have learned to save money and loan it to others in the group; some years from now these women are going to have happy families because they no longer have to ask their husbands, “Ah, please give me something with your money…haha” and so on. No. Now women are able to buy what they need with their own money.

I have nine savings groups that are operating strongly. They say thank you for this knowledge, and they’re sending their kids to school with money they’ve saved or profits earned from businesses financed by the group.

How has being a CKW improved your status in the community? Do people treat you differently now?

It’s changed my status from who I was then, a poor nobody, to who I am now three years later. Men are respecting me. Sometimes I’m a counselor; they call me in to help resolve a problem or counsel families. Kids call out to me, “CKW!” That’s how I’m known now, as “CKW.”

How has being a CKW changed your life?

It has made such a difference in my life. From a poor woman whom people say, “Who is she?” to now, “There is CKW!” I’m so proud to be a CKW and serve the community willingly.

Grameen Foundation has a new PPI Certification – Learn About it during our Upcoming E-Workshop

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Join us Tuesday June 24th at 10:00 AM (EDT / GMT – 4) for the E-Workshop Webinar:

“Instilling Confidence in Poverty Measurement: The New PPI Certification”

This webinar will be conducted in English. For our Spanish-speaking colleagues, the Portal de Microfinanzas (@Portal_MF) will be live-tweeting in Spanish the key points addressed by the speakers.

Click here to find what time the webinar will be in your county


Join us for an e-workshop co-hosted by the Microcredit Summit Campaign and Grameen Foundation for a discussion on the recent improvements to the Progress out of Poverty Index® Certification and the new additions to the Standards of Use

Featuring Frank Ballard, the Program Officer from the Grameen Foundation‘s Social Performance Management Center, and Analí Oda, a Senior Analyst from Planet Rating, and Chiara Pescatori, Deputy Social Rating Director at MicroFinanza Rating, this webinar will introduce participants to the changes and benefits of the new PPI Certification. 

The presenters will share their knowledge and experiences on how the renovated PPI Certification can improve an organization’s measurement of poverty, enhance its reputation, and build confidence in its practices.

Through the valuable insights offered in this webinar, participants will gain a better understanding of effective and reliable poverty measurement and the benefits that it has to offer.

Speakers: 

MCSC Logo Jesse Marsden, Research & Operations Manager (moderator)
Grameen Logo
Frank Ballard, Program Officer, Social Performance Management Center
Planet Rating Logo
Analí Oda, Senior Analyst
MicroFinanza Logo
Chiara Pescatori, Deputy Social Rating Director

Join us for this stimulating conversation to gain a deeper understanding of the improvements in the new PPI Certification and the benefits that it has to offer!

Follow this e-workshop and the Campaign’s 100 Million Project:

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Use hashtags #100MGoal and #Commit100M

Learn more about the 100 Million Project Project and Campaign Commitments

Release of Grameen Foundation’s PPI® Global Use Report: Who is Measuring Poverty and How?

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Julie Peachey, Director of Social Performance Management at Grameen comments on the release of the PPI Global Use Report. Español Français Continue reading

Sign onto the Declaration in Support of the Independence of Grameen Bank

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Please join us and other allies of Grameen Bank in endorsing the Grameen Declaration EspañolFrançais Continue reading

Learning from a Heretic

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By Larry Reed, Director, Microcredit Summit Campaign What can we say about a book that exposes a huge vulnerability in the microfinance industry, but does so by exposing only those facts which make its case and excluding those which give … Continue reading

Helping Haiti Recover

The world is mobilizing to address the massive earthquake that hit Haiti on Tuesday, dealing a horrific blow to the poorest nation in the Western Hemisphere. The reported epicenter of the earthquake is a highly populated area known to house many of Port-au-Prince’s poorest families. The International Red Cross estimates that one-third of the island nation’s 9 million people have been displaced by the earthquake and many thousands are dead.

This disaster requires both immediate emergency relief and longer term rebuilding efforts. Microfinance will play a crucial role in the financing needs that inevitably arise from this type of catastrophe as Haitians look to rebuild their country.

Please Donate Today

Below are microfinance organizations participating directly in relief and recovery work among earthquake victims in Haiti. Click on the organization link below to donate:

ACCION INTERNATIONAL

FINCA INTERNATIONAL

GRAMEEN FOUNDATION

Below are other organizations that include microfinance as a part of their work in Haiti, and are currently focused on providing immediate humanitarian assistance:

ADVENTIST DEVELOPMENT AND RELIEF AGENCY

CARE

CATHOLIC RELIEF SERVICES 

HABITAT FOR HUMANITY

WORLD RELIEF

WORLD VISION

Grameen Foundation in a $162.5 Million Credit Guarantee Partnership with USAID

On Monday, USAID has announced a partnership with Grameen Foundation for a $162.5 Million Credit Guarantee. By this valuable partnership, it will easier for the microfinance institutions (MFI) to access private credit as USAID and Grameen Foundation will share the credit risk.

As we all know, effects of the actual financial crisis also has an influence on the MFIs. As the unemployment rate increases, more and more people are trying to setup a micro-enterprise and this has increased the demand for microcredit.

According to USAID and Grameen Foundation, the 3 major ways that MFIs get funding are reinvestment of repaid customer loans, loans from commercials banks and finally grants from donors. As the financial crisis has reduced the access of commercial financing to the MFIs, this partnership between USAID and Grameen Foundation will provide credit enhancement for the MFIs.

Moreover, the partnership will lend money in local currency as they believe that this will present less risk of currency market fluctuations. In the actual financial meltdown, this partnership should give a helpful hand to worldwide MFIs who will profit from this partnership, an estimated of 691, 500 micro-entrepreneurs will benefit the loans provided by these MFIs.

The Partners

Grameen Foundation is “global non-profit organization that combines microfinance, technology, and innovation to empower the world’s poorest people to escape poverty. It has established a global network of 46 partners in 25 countries that has impacted an estimated 18 million lives in Asia, Africa, the Americas, and the Middle East. Grameen Foundation was founded by Alex Counts, who began his work in microfinance with Grameen Bank founder and Nobel Peace Prize recipient Dr. Muhammad Yunus.”

USAID is an independent federal government agency that provides foreign assistance worldwide. “USAID has been the principal U.S. agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms.”

To consult the Press Release