Testing a Methodology to Assess Microcredit Target Poverty in Bosnia-Herzegovina

This paper aims to develop new tools for targeting the poor, and tracking changes in poverty over time. It reports on people poverty in the contest of microcredit and microfinance interventions. The methodology uses a poverty scorecard applied to a rural context in Central Bosnia-Herzegovina.The interventions took place with two microcredit funds aiming to improve members' income generating activities. One was a women's association and the other was an association of disabled people. The methodology was applied through a questionnaire about each client's household, repayments and meetings.To measure poverty, the study uses seven household indicators that are strongly correlated to poverty status, local context and are easy and inexpensive to collect. The study:

• Derives a scorecard by assigning weights that reflect the indicators' correlation with poverty status;
• Adds up these weighted indicators to produce scores that can be ranked;
• Applies this methodology to a microcredit international cooperation intervention promoted by no-profit Italian stakeholders;
• Aims to measure poverty profile in order to build a monitoring instrument to evaluate projects and present a model that can be replicated by other actors.