CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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PPI Survey Helps Boost up Microfinance Image

The Centre for Self-help Development organized an online orientation program on “Progress out of Poverty (PPI) Index” on November 8, 2022. The objective of the program was to orient participants on the concept, objective and benefits of PPI as well as brief description on process of calculation. It also highlighted on the approaches taken and  activities carried out by Jeevan Bikas Laghubitta Bittiya Sanstha Ltd (JBLBSL) to gauge the poverty level  of its clients before  and after providing microfinance to them. PPI, in general, measures the state of  socio-economic progress a member makes  after the intervention from particular microfinance institution and it should be calculated periodically by microfinance institutions/third party  to monitor the current socio-economic status of its members and also to evaluate the effectiveness of its programs and activities.  The speakers in the program were Mr. Sanjay Kumar Mandal, CEO, and Mr. Sudip Kumar Mandal, Senior Manager of Jeevan Bikas Laghubitta Bittiya Sanstha Ltd.

Mr. Sanjay Kumar Mandal, said, “ Although most of the MFIs have made huge progress due to hard work, dedication and commitment put forward by the staff and all the stakeholders of microfinance , the sector as a whole has been confronting issues and problems and these have been aggravated more lately particularly due to conflicts among the members .  These issues have brought more serious consequences  lately because we are not focused on poverty anymore.” He added, “ We should quantify outputs and measure them. For example a farmer measures the amount of rice he harvests. Similarly, a shopkeeper may measure the amount of goods he sold in a particular timeframe. MFIs nowadays do not measure the socio-economic progress of their members although the overarching objective of MFIs is to bring socio-economic growth of its members and uplift the member from poverty level.”  About PPI, he said, “It has ten parameters to check the level of poverty among its members. The pilot testing was done manually in one of the branches of JBLBSL. It brought positive results among members after they got involved with JBLBSL. PPI does not measure financial progress made by the members. It measures the  progress in the standard of living of the members such as if the member has separate kitchen, toilet, bedroom and other basic amenities. We can give scores/grades to the members. If the whole microfinance sector is involved we can determine the impact made by the overall microfinance sector in poverty reduction and increase in the standard of living. JBLBSL has planned to carry out PPI every two years to check the level of progress made in terms of standard of living of its members. We will conduct PPI after the commencement of new fiscal year. After conducting PPI the second time we will be able to gauge the amount of progress we have made after providing microfinance service to our members. The first PPI survey was our baseline survey. To bring efficiency we have used apps to conduct PPI survey. It is compulsory that we go to the doorsteps of our members to conduct PPI survey. “

Regarding issues, he said, “Staff may think that it is a burden to them as it is extra work that they are doing. They may not take initiative to do this. Therefore, we need to motivate them to implement this task. If staffs do not visit the households of members it may not bring accurate result. For this, we have developed system in the software to track their location. Similarly, the data collector and enumerator may make mistakes while filling up the questionnaires. To minimize mistakes we need to verify the filled up questionnaire from the branch manager. We need to develop a timeframe to fill up the questionnaire. For this the staff have to provide extra time and effort.”

Mr. Sudip Mandal said, “ The objective of microfinance is to work for poverty alleviation. The problem is that we do not have reliable data to show the amount of progress we have made in reducing poverty.” Regarding the history of  PPI he said, “ PPI was initiated in 2005  by Grameen  Foundation with the support of CGAP. In 2010 Nepal Living Standard Survey was conducted and questionnaires were pooled from it to develop  new set of questionnaires for PPI. Likewise, from  2013 to 2016 RMDC conducted a training program on PPI with the support of Good Return which was organized in Nepal. The worldwide PPI alliance has also been formed which is under the ownership of  Innovation of Poverty Alleviation (IPA).”

He further added, “PPI has ten questionnaires and a member gets an aggregate scores based on his answers.  The aggregate score is used to determine/access his/her level of poverty/standard of living. PPI is used in 46 countries around the world. Initially we should determine the geographical location and the type of survey (sample or census approach)  to be conducted. We should then develop questionnaires and carry out survey in the field.  It is better to conduct pilot survey before the overall survey is conducted.  Sample survey just provides mirror image of the particular member. Although sample survey is cost effective and time efficient,  it does not provide overall picture of the country. JBLBSL conducts survey through census approach  to find out the true picture of each individual member and provides tailor made support to each individual member based on the score.  As per our survey we were able to locate two ultra-poor family members in a single branch. We are working on how to uplift his socio-economic conditions based on the score. Census approach helps us to locate members who need immediate intervention. After two years when the next batch of survey will be conducted we will know whether our intervention has uplifted him/her from the previous conditions.” There are certain code of conducts for the surveyor which are, “PPI survey should be conducted in members’ household, one survey form is for the entire household and no two forms should be used for single households and member of particular MFI or the eldest member of the household should be questioned. Similarly, questionnaires and answers should not be altered once it is finalized,  brief background on the survey should be provided before the survey and members  should be informed on the objective of survey and how the information provided will be used. Questions on poverty with the view of demoralizing the members should not be raised.”

The  questionnaire requires information on number of members in the family who have been living in the family for more than six months (should include child younger than 6 months, newly married bride and those who started to live permanently in the house) and outsiders living with the same family and understanding occupation of family head of the household.  Similarly, question will be raised on living rooms used by family members ( it should be large enough to place a bed), materials used to make the walls of the house (not cowsheds, warehouse and compound) and materials used to make roof. Whatever material is used to construct walls  in higher percentage should be mentioned. Questions will be raised if the household has separate kitchen room (kitchen should have roof and enclosed walls), types of cook stoves used in cooking (if more than one type of stoves are used then stoves used for majority of cooking should be mentioned). Other questions include types of toilet used (those staying in rent and using common toilet will be categorized as community toilet), number of telephone sets ( landline, cordless and mobile), land ownership (questions will categorize irrigated, non-irrigated  and collateral land and not include kitchen garden).  He said that questionnaires would be synchronized with central data when there is Wi-Fi access.  We have used additional questions which we have categorized as PPI+ where we ask additional questions such as whether children go to school, access to national grid and so on.

Mr. Sudip Mandal also said that two smaller shaped triangles which consist of community and staff will balance another triangle consisting of organization. The three triangles will make a bigger shaped triangle. If there is problem  in one of the triangles it will cause mismatch and it will not be able to balance the third triangle. It is hoped that PPI will support in balancing the three triangles and thus help in organizational sustainability.

Mr Sanjay Mandal said, “PPI calculates individual standard of living and also how much assets s/he has. Multidimensional poverty focus on health , education and standard of living with emphasis on  food poverty, national poverty, dollar 1.25 and dollar 2. It does not directly focus on per capita income and assets. JBS has focused on PPI+ which focus on amount of land, household connected to national grid and so on. We can compare data collected at the interval of two years as all the data are compiled.  Regarding software management we should consult IT companies.”

On queries from Mr. Ram Prasad Kafle, Managing Director of Nawaprativa SACCOS on PPI+, Mr. Sanjay Mandal said that PPI+ does not interfere  with the PPI result but only gives extra information.

Mr. Narendra Singh Bista, CEO of Swabalamban Laghubitta Bittiya Sanstha Ltd said, “Indicators may  need to be different for hilly and plain regions to get reliable result. Assets of household members should also be incorporated.”

Mr. Shankar Man Shrestha, “ PPI training was conduced a decade back. A total of two batches of training was conducted on PPI with the coordination of RMDC. At that time a formal dialogue was also organized  based on the data gathered after carrying PPI. CSD had also organized a program for CEOs of MFIs where  a dialogue was organized focusing on the types of indicators to be used in conducting PPI. However, no organization has bothered to conduct PPI expect JBLBSL. Currently MFIs have been under attack from various individuals, associations and organizations asking how many members have got out of poverty. PPI is the tool which can provide evidence  to those critics. This tool will also give us figures on the percentage of members of MFIs who have uplifted themselves from the level of poverty. While taking license from concerned authority we had mentioned poverty alleviation in the memorandum of association (MOA) and preamble. PPI is the tool to give justifications to those critics of microfinance who want MFIs to be dissolved. At this moment counter propaganda   is not necessary. MFIs are under attack due to our own misdeeds and MFIs not abiding by the principle and values of microfinance.” On type of sampling method to be used, he said, “ We should use census method to observe the socio-economic condition of each individual member after intervention.” He further added, ” We should also organize public audit in each rural municipality by inviting prominent individual from the local area.  MFIs need facelift as they have already discarded tools such as     Participatory Wealth Training (PWR) and Pre Group Training (PGT). CEOs should take initiative to use PPI and show their contribution on poverty reduction to those critics and also for your own satisfaction. Currently, we are only focusing on dividend, profit maximization and so on. Grameen Koota of Bangaleru has not distributed  dividend in the last 17 years to build up its own capital base. In our case due to distribution of dividend and lack of liquidity in the country  there is a great shortage of fund for running the organization. On top of that we are indulging in malpractice such as greening and other unlawful acts. Apart from PPI, JBLBSL has focused on PPI+, human ATM, credit plus and housing with focus the poor.  With regard to future course of action, he said, “We will conduct  ToT  on PPI for two participants of each of MFIs consisting of branch managers for pilot test.  Then  we will review and decide how we should move ahead regarding the modality of conducting PPI training and show survey procedure.

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