Posted by Preeti Wali, Communications Associate, Grameen Foundation
A few weeks ago, we introduced the Progress out of Poverty Index™ as a way for microfinance institutions to monitor whether they are helping their clients move out of poverty. We conducted an interview with Grameen Foundation and Prisma Peru, who discussed how they are implementing the PPI™. Here, Preeti Wali describes how they are using the PPI™ in Fonkoze in Haiti and adjusting strategies to better serve the poor.
Haiti is the poorest country in the Western Hemisphere. For Fonkoze, the largest microfinance institution (MFI) in Haiti, the mission was clear: target the poor and ultra-poor, mainly women in rural areas, and provide services to meet their special needs. In 2006, Fonkoze—working with Grameen Foundation--introduced the Progress out of Poverty Index™ (PPI™) assessment tool to measure the poverty level of its clients and to track their progress.
“When Grameen Foundation approached me about forming a partnership, the prospect of developing a PPI for Haiti was one of the most exciting elements,” says Fonkoze Director Anne Hastings. “We want numbers behind the promises we make to the poor.”
Just two years later, the results are positive: data collected in 2008 showed that Fonkoze was meeting its goal to target the poorest, and that its programs were showing results. Clients who had been with Fonkoze for at least two years saw movement out of poverty; seven percent moved above the $1 a day poverty line from 2006 to 2008, and nine percent moved above the $2 a day line. This movement occurred despite Haiti’s extreme poverty, which was compounded by the devastation of three hurricanes and a tropical storm that threatened or destroyed the livelihoods of approximately 14,000 Fonkoze clients.
Embracing innovation, Fonkoze’s Social Performance Department has created two important new services.
(1) Their focus on targeting clients and determining their particular needs led to Fonkoze’s “Staircase Out of Poverty” approach: a set of four, tiered programs that begins with “asset transfer”—providing livestock or poultry for an ultra-poor household, for example—and culminates in a tier that offers individual business development loans. To date, 75 percent of Fonkoze’s ultra-poor program participants have “graduated” into a small loan microfinance program, the next step up the staircase.
(2) Fonkoze places heavy emphasis on supporting field staff and building client relationships. It created a special cadre of staff called Social Impact Monitors (SIMs) to work with credit agents to collect and verify data on incoming clients and to track these clients over time. These “action researchers” provide management with timely information about its products and services, ensure another level of quality control, and build client trust.
Grameen Foundation and Fonkoze just released a case study, "The PPI at Fonkoze: Applying Client Research to Programs and Services," describing the MFI’s use of the PPI to serve its clients. Fonkoze has also reported on social performance indicators to MIX, which you can find here.
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