SONATA:
Progress out of Poverty Index (PPI)
Pilot Summary of Analysis
February 2009
Sonata’s Mission and Goals
Mission:
“Identify and motivate poor women in a cost-effective way and deliver them micro finance
services in an honest, timely and efficient manner."
Goal:
“SONATA's ambition is to ensure that at least 50% of people who enter the program cross the
poverty line within 5 years of participation in the program.”
Progress out of Poverty Index
What is it?
• An objective client poverty assessment and targeting tool, which:
– Provides client poverty level, social performance, data
– Enables MFIs to manage social performance
• An inexpensive and easy to collect scorecard
– Derived from representative national household income and expenditure survey
– Comprised of simple, non-financial indicators
Who Is Using the PPI?
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Within the Grameen Foundation Network
– Asia – 9 partners
– Latin America – 4 partners
– MENA – 2 partners
Globally
– MFIs: Over 40 institutions
– Social investors
– Social raters
– National/Regional networks
– Government institutions
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Sonata’s PPI Pilot Design
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•
•
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PPI Pilot objectives:
– Gather representative PPI data across six branches in the UP region
– Gauge the operational and logistical challenges and opportunities associated with
implementing the PPI
Pilot Scope: Six branches
Pilot Duration: Eight weeks
Pilot Sample Size: Census approach, all incoming and renewal clients within an eight-week
period.
PPI Pilot Collection
*Clients without a loan cycle specified were not used in the analysis and are displayed
under the ‘Applied for Loans’ column.
**32 entries were not included in the analysis due to duplicate entries.
Overall PPI Analysis
Entering Clients
•
26% of new clients are below the national poverty line,
•
38% are below the $1/day poverty line, and
•
88% of the clients are below the $2/day poverty line.
Renewal Clients
•
30% of renewal are below the national poverty line,
•
46% are below the $1/day poverty line, and
•
91% of clients are below $2 a day.
Rural Vs Urban
Looking at the entering clients(below), it is clear that the rural clients are
more likely to be poor (29.7% below National Poverty Line as compared to
12.2% for the entering Urban clients.)
Branch wise Analysis
Branch wise classification
• In terms of branch wise classification of poverty levels, there is a great range of poverty levels
across branches, especially for entering clients.
• For example, Saray Akill is targeting the poor in the sample with over 33.3% of the entering
clients below the national poverty line and almost half of the clients below the $1/ Day
poverty line
• Renewal clients, however, seem to have the same likelihood of poverty across branches.
Branch wise Analysis: (Continued)
Occupation of Clients
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Animal Husbandry, Buffalo, and Goat purchasing is the most common type of business that
clients are doing. Approximately 60% of the entering clients (249 clients out of the 416) are
involved in this business.
However, looking at poverty likelihoods, 35% of such entering clients (in animal husbandry)
are below the national poverty line.
The renewal clients who own general stores are less likely to be poor as compared to renewal
clients in other occupation, quite understandably.
Occupation and Poverty
Loan Amounts and Poverty…
For both entering and renewal clients, the higher the loan
amount, the less likely the client will be below the poverty
levels (excluding those with a loan amount of zero).
Loan Amounts and Poverty
Age and Poverty
Age
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In terms of age, the entering clients mostly fall between 25-45 years. Though clients across all age groups have
almost the same poverty levels, further analysis shows that the younger entering clients are poorer than the older
new clients.
•
The renewal clients show the same patterns of likelihood of poverty, irrespective of the age group. However, the
renewal clients above the age of 45 seem likely to have the least possibility of falling below the poverty lines.
Age and Poverty
Conclusions
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It does make a lot of sense to position ourselves on the social front, which has been one of the key USPs of Sonata
More so, when we have things like socials ratings, social performance, social audits
CHI V/s PPI
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CHI – targeting
–
PPI – targeting, tracking, impact assessment, national level bench marking, strategic decision making
Implementation Plan – next slide
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As a Performance measurement tool
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As an Impact Evaluation tool
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Census approach (entering, renewal, cycle 1/3/5, 2/4/6, exit clients)
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Sample basis (a few clients, a few branches, a few years)
Synchronization with the MIS
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Repeated / Multiple set of information
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Interface software tool from GF
Addressing Implementation: Key Factors
• Key factors to consider when preparing for
implementing the PPI
Management
Information Systems
Quality control &
validate
requirements
Reporting
capabilities
Human Resources
New employee
(staff & Mgrs)
training
Ongoing
training
Policy
Collection
protocol/policy
Collection
quality
control
Performance
Management
Reporting
(internal/external)
Monitoring
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Thank You!
APENDIX
Poverty Lines
Based on the same data1 the PPI is based on:
– 17.0% of Indians are below the National Poverty Line (Rs 14.25)
– 8.4% of Indians are below the USAID “estreme” line (Rs 11.94)
– 9.5% of Indians are below $0.75/Day/PPP (Rs 11.53)
– 25.4% of Indians are below $1/Day/PPP (Rs 15.38)
– 42.6% of Indians are below $1.25/Day/PPP (Rs 19.22)
– 56.9% of Indians are below $1.5/Day/PPP (Rs 23.07)
– 74.9% of Indians are below $2/Day/PPP (Rs 30.75)
1Source:
Microfinance Risk Management, L.L.C. based on Schedule 1.0 of Round 62 (July 2005 to June 2006) of India's Socio-Economic
Survey (SES) conducted by the National Sample Survey Organization (NSSO, 2005).
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Utter Pradesh Poverty Rates