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Progress out of Poverty : Business intelligence for those in the business of helping the poor.

The following case studies are examples of how organizations working with the poor have used the PPI to strengthen their business and better serve their clients:

How an impact investor uses the PPI to monitor and support its investees.

Oikocredit is one of the world’s largest sources of private funding to the microfinance sector, as well as a lender to trade cooperatives, fair trade organizations and small-to-medium enterprises (SMEs) in the developing world. Oikocredit believes firmly in the principal of the double bottom-line; its website states, “We offer a dual return to our investors: financial and social. In addition to earning modest financial returns, investors are secure in the knowledge that their money is being used to fight poverty, promote fair trade and respect our planet’s natural resources.” As of March 2012, Oikocredit had € 508 million (or close to $631 million) total capital outstanding and 878 partners.

Oikocredit is committed to providing a social return to its investors, and so it is no wonder that Oikocredit is a leader in social performance management  and a particularly strong advocate of the PPI. Oikocredit stresses the importance of poverty measurement to its investees and in many cases is willing to fund training and education activities to make it easier for the investee to adopt the tool. Most notably, Oikocredit even goes so far as to offer better terms and conditions on loans to “preferred partners” who use the PPI and demonstrate consistently that they are focused on reaching the poor.

How mobile technology and the PPI are collecting real-time data about the wellbeing of workers in a supply chain.

Once seen as a luxury, the mobile phone is now a very common possession worldwide, even in developing countries. This basic technology connects people to each other, to employment, and to their assets. Laborlink, an initiative of Good World Solutions, leverages this pervasive technology for sharing and collecting data from supply chain workers. Using the PPI, Laborlink has built a virtual platform for viewing poverty and change in poverty over time across multiple factories.

First, workers receive a card with instructions on how to participate written in the local language. Workers then dial a local number using their mobile phone and reply to multiple-choice questions with their keypad. Laborlink aggregates the information it collects from workers through these mobile surveys and conducts analysis for participating companies. Messages can also be delivered back to the workers on topics such as good health practices, education, employee rights, and so on. This system allows companies to monitor working conditions between audits, measure worker satisfaction, and track social impact. Workers benefit because their wellbeing is being systematically accounted for. Visit their website to see the PPI in action in India.

How a Haitian MFI used PPI data to evaluate disaster recovery products

Fonkoze is Haiti's largest, most innovative microfinance institution. Fonkoze is recognized throughout the microfinance industry as exceptionally dedicated to its mission to help poor Haitians build a better economic future for themselves. An early adopter, Fonkoze has been using the PPI since 2006.

In 2008, Fonkoze developed the Hurricane Loan Program in response to a string of storms that destroyed the livelihoods of 14,000 clients. This one-time program swiftly put fresh capital into the hands of clients and provided reduced interest and flexible repayment terms to help them re-establish their businesses. Fonkoze collected baseline PPI data on more than 300 hurricane victims in six branches who participated in the program, and re-interviewed them one year later. Results yielded from PPI data showed that the sample of hurricane-affected clients moved out of poverty at the same rate as non-hurricane-affected clients over the same time period. This information was critical to Fonkoze's evaluation of the program.

About one year later, the catastrophic earthquake hit. Lessons learned from the Hurricane Loan Program allowed Fonkoze to act quickly and with confidence that they had the power to make a difference in the lives of those who lost their homes and their livelihoods. The services they provided in that time shaped the development of Kore Fanmi Fonkoze, a micro-insurance product.

How PPI data improved governance and influenced product design for an Indonesian social enterprise

PT Rekan Usaha Mikro Anda (Ruma), which translates to mean “Your Microbusiness Partner,” is an Indonesian social enterprise that targets those living on less than $2.50 per day with pre-packaged small businesses, or microfranchises. Ruma's main microfranchise involves clients selling mobile airtime from their cell phone, but Ruma also provides training and mentoring services.

Ruma is unique because, from the start, its leadership has made reaching the poor a priority; Ruma’s founding articles state that at least 80 percent of new clients should be likely to live below the $2.50/day/PPP poverty line. The bylaws also state that no shareholder will receive a dividend, should there be any profits from the business, unless the company meets its social targets. In its first year of operations, Ruma measured its poverty outreach using the PPI and found that it was well below its target - only 69 percent of clients were classified as poor, opposed to 80 percent.

Ruma then segmented its client base to focus on the traits and behaviors of its poorest clients. Ruma was able to identify the right product modifications for meeting the needs of the poor. And while these modifications may have been costly if applied to the whole portfolio, they were cost-effective when applied only to clients classified as poor by their PPI score. In this way, the PPI is a valuable measurement and management tool.