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Pioneering the PPI™ in Cambodia >

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--Guest blog by Ben Simmes of Oikocredit--

It is true pioneering. Twenty eight representatives from four different Cambodian microfinance institutions and staff and trainers from Grameen Foundation, Plan International and Oikocredit work closely together for a full week to start the implementation of the PPI in Cambodia. The trainers, Awais Muhammed from Plan International, Meldy Pelego from Oikocredit and Cris Lomboy from Grameen Foundation, guide the group through an intensive training program. I never realized that a "simple" tool that asks ten questions of clients of microfinance institutions to assess how poor they are could be so difficult to carry out. However, it is!

The training is well designed. An important element that has to be explained carefully is not only that the choice of the ten questions is based on scientific research, but also the answers to the questions have to be interpreted. The basis for the questions is the 2004 social and economic research that was undertaken in Cambodia by the government. From this elaborate research with hundreds of questions and lengthy guidelines, ten questions are constructed. These questions and their answers provide statistically sound information about the level of poverty of clients of microfinance institutions.

Using the PPI, the Progress out of Poverty Index, is for Oikocredit very important and we are therefore very pleased that all four pioneering microfinance institutions are partners of Oikocredit. Using the PPI is important because all microfinance institutions aim to serve a special group of people, the poor. And not only that, through microfinance we aim to bring them out of poverty. The PPI tool enables a microfinance institution to assess the level of poverty of their clients and, by using this same tool again after one or two years, it also makes it possible to track changes over time.

This tool is, however, not just about collecting data, argue the trainers regularly. The key is to use these data to fine-tune and strengthen the social performance of a microfinance institution. Sometimes the results can be very revealing to a microfinance institution as Oikocredit learned from a partner in Peru. To their "unpleasant surprise" they found out that, although their mission was to serve the poor, the data showed that more than 60 percent of their clients lived above the poverty line. It lead to serious discussions among staff, management and board and a firm commitment to reach out to the clients they really aimed to serve.

Oikocredit has decided to support Grameen Foundation in the roll-out of the PPI in our network. Because Oikocredit works with more than 450 different microfinance institutions worldwide, it is a challenging task. It is work in progress. After the introduction of the PPI in Ecuador, Peru and the Philippines, we are now on the way to introducing it with Grameen Foundation in Senegal and Mali. And yes, this week also in Cambodia.

The 28 participants, after three days of training about the background of PPI, the ten questions and categories of answers, are now ready to go to the field. In small groups they will interview clients of two different branches in the vicinity of Phnom Penh. Thereafter, they will come back to start the next part of the training: analysis and interpretation of the data. And then, during the last day of the training, they will discuss possibilities and ways to develop an action plan on how to implement this tool in their own organizations.

It seemed so easy, ten questions to ask, but it is clear from the intensive program these first three days that understanding and really implementing this poverty assessment scorecard is an important, challenging but also necessary step forward in social performance management.

Ben Simmes is a guest blogger on the Progress out of Poverty blog. As the Director of Social Performance & Financial Analysis at Oikocredit, Ben brings a unique social investor perspective to social performance management and the PPI. Ben has worked at Oikocredit since 1996. Prior to working for Oikocredit he was employed with Central Mission Commisariat as head of the department of Overseas Development Workers. Ben has also worked for different organisations in the Philippines and Papua New Guinea.