Movement Above the US$1 a Day Threshold Project

Project Summary
This project seeks to address the measurement challenge presented by the Microcredit Summit Campaign goal of ensuring that 100 million clients rise above US$1 a day by 2015.  Through the analysis of existing panel data and expanding the use of cost effective poverty measurement tools, the Campaign plans to bring poverty measurement to scale within the field of microfinance.

Project History
The Movement Above US$1 a day Threshold Project was created in 2006 after Global Microcredit Summit Campaign delegates gathered in Halifax, Canada and committed to the two Phase II goals of the Campaign.  The Campaign’s second goal, in alignment with the Millennium Development Goal to cut $1/day poverty in half by 2015, is an ambitious undertaking and ineffective without the appropriate quantitative measurement tools. One significant impediment for member organizations is insufficient data illustrating the impact of microcredit on clients’ lives—until recently, there was no efficient way for institutions to know whether their clients either had started below US$1 a day or had moved above that marker.  Through this project, the Campaign helps to remove the barriers its members encounter while working toward the two Phase II goals.

Project Partners
The Microcredit Summit Campaign has partnered with fifteen of the largest microfinance institutions and networks worldwide. Together these organizations seek to measure microfinance clients’ economic well-being and will introduce poverty measurement tools such as poverty scorecards, or “Progress out of Poverty Indices (PPI)”—a poverty measurement tool designed by Mark Schreiner for the Grameen Foundation and with the CGAP/Ford Foundation Social Indicators Project. Dr. Schreiner is an expert in the field who has worked closely with both the Campaign and the leading researchers of participating microfinance institutions to ensure proper implementation of the tool.

How do poverty scorecards work?
MFIs ask clients to answer a few simple questions or “indicators,” which correlate to a poverty likelihood percentage for that client.  For example, MFIs in Country A will need to collect information on the construction material of clients’ homes, whether they own a radio or similar household durable, and eight other simple indicators.  The answers to these indicators produce a “poverty score” which can be converted into “poverty likelihoods,” which allow MFIs to measure the poverty levels of clients and how they change over time.

Poverty Scorecard

Sample poverty scorecard

Project Next Steps
There are a number of other activities underway, including:

  • selection of a local institution in Bangladesh and India to conduct long term monitoring of poverty scorecard use in those countries
  • selection of a panel of local experts in Bangladesh and India to write commissioned papers in their respective countries on the number of clients who have moved above the US$1 a day poverty line 1990-2007
  • reporting to MCS the results of numerous pilot projects of the poverty scorecard for India and Bangladesh and the full scale implementation of poverty scorecards by BRAC and ASA in Bangladesh.

Campaign Partners
Association of the Asian Confederation of Credit Unions (ACCU), Thailand
Association for Social Advancement (ASA), Bangladesh
BRAC, Bangladesh; FINCA International, USA
National Bank for Agriculture and Rural Development, (NABARD), India
Opportunity International, USA
SHARE Microfin Ltd., India
Spandana, India; Samurdhi Authority, Sri Lanka
Vietnam Bank for Social Policies, Vietnam
Central People's Credit Fund, Vietnam
Palli Daridra Bimochon Foundation (PDBF), Bangladesh
Tamil Nadu Corporation for the Development of Women, India
SIDBI, India; and Pakistan Poverty Alleviation Fund (PPAF), Pakistan