Poverty Targeting and Measurement Tools in Microfinance: Progress out of Poverty Index and the Poverty Assessment Tool
This report reviews two standardized tools that allow MFIs to measure their poverty outreach and client targeting.
Microfinance stakeholders are becoming increasingly interested in poverty targeting and measurement due to increasing criticism that the industry is straying from its original mission of poverty alleviation. Some MFIs have developed their own measurement tools to track client poverty, while others use household income or household expenditure analysis and geographic targeting. The report reviews the Poverty Assessment Tool and the Progress out of Poverty Index, which promise to be cost-effective ways to target and track outreach. It:
- Explains the construction of the tools;
- Explores different dimensions of the tools, such as accuracy and implementation;
- Recommends ways to improve microfinance scorecards;
- Summarizes feedback given by implementers on a set of six indicators.
The report is meant for MFI managers, staff involved in monitoring and evaluation, policy makers and donors, and investors concerned with MFI poverty outreach.